By Christina Franc
Canada exports 600,000 tonnes of forage each year, with an estimated value of $150 million. This market is continuing to grow, particularly in the United Arab Emirates.
Selling hay to the UAE opens a world of possibilities, and a world of possible problems, says Alan Gardner of Haydar Group of Companies. None of these challenges are insurmountable once you understand the characteristics of the market. However, the cost of not knowing these requirements can be significant, he says.
“The Middle East can be a strange place; I easily lost $200,000 my first day in the United Arab Emirates,” Gardner said during his presentation at the recent Canadian Forage and Grassland Association conference held in late mid-November.
The first thing to know is where to sell, and of the seven emirates, Dubai, Abu Dhabi and Sharjah are the places where an exporter can make money.
While quality is important, two of the most important factors are the colour and absence of dust. Timothy hay needs to be a vibrant green colour, no exceptions. Gardner also said his containers are specifically designed to ensure dust does not build up on the way to their destination.
“What the market needs and what the market wants are two entirely different things,” said Gardner, speaking of the priorities that the UAE focuses on.
Consider their climate too, Gardner pointed out that 10 per cent protein is the highest percentage acceptable due to the intense heat. The rest of the business transaction revolves around sound principles, including customer service, skillful networking and relationship building, consistent quality and availability. When Gardner once heard that his customers weren’t satisfied with the hay they had received, the first thing he did was get on a plane to see the product himself to reinforce his dedication to quality.
Once you’re aware of these requirements, it’s crucial to understand that there is significant risk in selling to the UAE, in particular ensuring payment is received, finding the contacts and dealing with an already-saturated market.
Gardner has also learned that when payment is received, his clients will make him foot the bill for bank charges, and so now he will tell them he is sending 25 tonnes when in fact he is sending 23 tonnes in order to avoid losing money. Rest assured, his clients are well aware of this and understand that otherwise quite simply he would not make any money.
At the same time, UAE clients buys hay by the ‘piece’ rather than by weight. So whether the piece is 50kg or 70kg, the client is paying for 50kg. Therefore Gardner guarantees the piece weight is always the same to protect himself and his farmers.
Gardner recommends working through an intermediary, such as Haydar Group of Companies, if you’re interested in exporting to help cut the risk, expense and problems that arise. Haydar is looking for long-term relationships, and therein lies the opportunity for Canadian farmers without the risk, he says.
If you’re looking for more information, get in touch with your regional forage association or the Canadian Forage and Grassland Association at www.canadianfga.ca.