Ambassador Slutz Welcomes the Arrival of 25,000 Tons of
Donated American Wheat to Ulaanbaatar

Today US Ambassador Pamela J. Slutz welcomed a train carrying 25,000 metric tons of American wheat as it arrived in Ulaanbaatar.  The donated wheat, valued at about Tugruk 4.6 billion (US$3.8 million), is part of a United States Department of Agriculture program to help provide funding for development projects in Mongolia while providing Mongolian consumers with healthy, fortified, high quality American wheat flour.   

On August 9, 2005, the United States Department of Agriculture signed a grant agreement with Mercy Corps to bring 25,000 metric tons of U.S. wheat into Mongolia to be milled locally and sold as flour.  The proceeds from the sale are to be used for development projects in Mongolia implemented by Mercy Corps.  Specifically, all proceeds will be used to implement the Rural Agribusiness Support Program (RASP).  The RASP program is implemented in eleven Aimags of Mongolia; Hovd, Zavkhan, Gobi Altai, Bayanhongor, Arhangai, Uvurhangai, Dundgovi, Umnugovi, Dornogovi and Sukhbaatar.  Full details on the program are available on the Mercy Corps Mongolia website www.mercycorps.org.mn

Three buyers of the 25,000 metric tons of wheat entered into sales agreements with Mercy Corps on November 25, 2005.  Two of the buyers have flour milling operations in Ulaanbaatar and a third is located in Choibalsan.  The wheat was sold through a competitive and transparent tender process with an average selling price of MNT 180,840 per ton (US $150.70).  This price was comparable to world wheat trading prices.

The objective of the wheat sales was to generate the greatest possible proceeds from the private sector sale in order to fund development programs for the benefit of Mongolia.  The wheat was sold using a price as close as possible to the world wheat market price.  The aim of the program is not to interfere with or undercut Mongolian wheat producers.  Therefore the wheat is planned to arrive in Mongolia at a time when no local wheat is available on the market for sale, and when the demand for wheat and high quality flour is high. 

The buyers have guaranteed that the wheat will only be used for the production of flour, and that the flour must be fortified with iron, vitamins and micronutrients.  The production of alcohol is expressly prohibited in all sales agreements.  The program promotes the iron, vitamins and micronutrient fortification of the wheat flour for the following reasons:

a) Flour fortification is an important component of Mongolia’s public health strategy and  is  a cost effective way to improve the nutritional health of Mongolians. 

b) Adding iron, vitamins and micronutrients to wheat yields health benefits, including a lower prevalence of anemia which results in healthy productive people, reduced birth defects and reduced maternal deaths.