Know the customer | Quebec exporter says Kuwaiti horse owners may drive a Lamborghini but haggle over feed prices
BROMONT, Que. — Exporting hay to the Middle East is all about connections.
Alan Gardner’s connections in Kuwait, the United Arab Eremites and Qatar just happened to be influential princes and sheikhs.
“They’re decent contacts,” Alan Gardner of Northern Ireland told the Canadian Forage and Grasslands Association conference.
Gardner met many of his contacts years earlier at Sandhurst, the British army training centre.
“I never knew they were sheikhs or princes. I met them as mates.”
Influential partners and contacts may open the door, but it doesn’t ensure that all the hinges will be greased and that hay will enter easily into the country.
Gardner said he lost about $350,000 on one of his first deals because the hay didn’t live up to what was promised. He racked up about $45,000 in demurrage costs on another deal while the hay sat in a Kuwaiti port.
Many Canadian exporters ship hay to ports where the ownership transfers to someone within the country. Shipping beyond the port has its own complexities and rules, which can be solved only by having good connections.
“It’s everything to do with relationships.”
Gardner concentrates on three main markets: the horse market, the high-end horse market and the camel market. High-end racing camels sell for $5 to $10 million, and trainers feed only the choicest hay. This is the most lucrative market.
Buyers in Qatar, the UAE and Kuwait all want different products.
In the UAE, all hay is bought based on appearance. If it’s not green, there is trouble.
“What they look for is colour. They buy visually. In Dubai, they don’t buy by weight, they buy by sight. Any brown leaf, it is trouble.”
The UAE is made up of seven emirates, each governed by a ruler. The key hay markets are in Dubai, Abu Dhabi and Sharjah.
Gardner said Kuwait is one of the toughest countries in which to sell hay. Horse owners drive Lamborghinis and quibble about the price of horse feed.
He said he has shipped containers of feed to Kuwait that were ordered but rejected because of colour. Buyers base most of their buying decisions on colour.
“What the market needs and what the market wants are two different things,” he said.
Price is important in Qatar but not as big as UAE and Kuwait.
Horse and camel owners want only first cut timothy hay.
“It’s the only thing shipped into Qatar,” he said.
Exports to the Middle East are not impossible, but sellers must know what they’re doing and do it right, said Gardner.
Cyrus Weasel Fat of the Blood Reserve in southern Alberta said he hasn’t had many problems selling hay to the Middle East.
“So far, so good,” said Weasel Fat, who has shipped hay from Alberta to the Middle East for about four years.
He sells some of the reserve’s hay through Gardner, but also sells hay to customers in Ireland.
Weasel Fat said knowing the people and the industry is key to selling hay in the Middle East.
“It’s a unique and unfettered market. It’s not regulated like grain. It can change dramatically.”
The reserve doesn’t sign contracts until after the hay is in the shed because of the difficulties involved in making hay.
Hay is made on about half the reserve’s 22,000 acres with its own machinery and custom operators.
Harvested hay is compressed, loaded into containers and shipped.
He said selling to the Middle East was a simple decision.
“It has a higher return.”