World Grain - February 2020 - 18

COUNTRY FOCUS

FOCUS ON

SAUDI
ARABIA
Country reintroduces domestic
wheat production
by Chris Lyddon

Saudi Arabia has reintroduced domestic wheat production, despite concerns over water consumption for irrigation.
The International Grains Council (IGC) estimates Saudi Arabia's 2019-20 wheat production at 700,000 tonnes, up from
500,000 tonnes in 2018-19, and zero the year before that. It puts
2019-20 sorghum production at an unchanged 200,000 tonnes.
The IGC forecasts Saudi Arabia's total 2019-20 grains imports
at 14.8 million tonnes, up from 13.7 million the year before. Imports of wheat are forecast at 2.9 million tonnes, down from 3.1
million the previous year. Imports of maize in 2019-20 are put at
5 million tonnes, up from 4 million tonnes. Barley imports are
forecast at 6.9 million tonnes, up from 6.6 million the year before. Saudi Arabia also is expected to import an unchanged 1.4
million tonnes of rice in 2019-20.
The USDA attaché explained how the country's
wheat production has gone from zero to the
current level.
"Saudi Arabia partiality rescinded
a virtual ban on domestic production of wheat that had been
in place for three years," a
report on the grains sector
from April 2019 explained.
"Wheat production is being
permitted to provide medium- and smaller-size forage
producers with an alternaWLYH¿HOGFURS´
A ban on wheat production
had been imposed at the end
of 2014-15 because of concern
over the use of water.
"Many have been forced to
cease forage production because of
18

KEY FACTS
Capital: Riyadh
Population: 33,091,113 (July 2018 est.)
Religions: Muslim (official; citizens are 85% to 90%
Sunni and 10% to 15% Shia), other (includes Eastern
Orthodox, Protestant, Roman Catholic, Jewish, Hindu,
Buddhist, and Sikh) (2012 est.).
Location: Middle East, bordering the Persian Gulf
and the Red Sea, north of Yemen.
Government: Absolute monarchy. Chief of state and
head of government: King and Prime Minister Salman
bin Abd al-Aziz Al Saud (since Jan. 23, 2015).
Economy: Saudi Arabia has an oil-based economy
with strong government controls over major economic
activities. It possesses about 16% of the world's proven petroleum reserves, ranks as the largest exporter
of petroleum, and plays a leading role in OPEC. The
petroleum sector accounts for roughly 87% of budget
revenues, 42% of GDP, and 90% of export earnings.
Saudi Arabia is encouraging the growth of the private
sector in order to diversify its economy and to employ
more Saudi nationals. Approximately 6 million foreign
workers play an important role in the Saudi economy,
particularly in the oil and service sectors. At the same
time, however, Riyadh is struggling to reduce unemployment among its own nationals. Saudi officials
are particularly focused on employing its large youth
population. In 2017, the Kingdom incurred a budget
deficit estimated at 8.3% of GDP, which was financed
by bond sales and drawing down reserves. Although
the Kingdom can finance high deficits for several
years by drawing down its considerable foreign assets or by borrowing, it has cut capital spending and
reduced subsidies on electricity, water, and petroleum
products and recently introduced a value-added tax
of 5%. In January 2016, Crown Prince and Deputy
Prime Minister Muhammad Bin Salman announced
that Saudi Arabia intends to list shares of its stateowned petroleum company, Aramco. This is another
move to increase revenue and outside investment.
The government also has looked at privatization and
diversification of the economy more closely in the
wake of a diminished oil market. Historically, Saudi
Arabia has focused diversification efforts on power
generation, telecommunications, natural gas exploration, and petrochemical sectors. More recently, the
government has approached investors about expanding the role of the private sector in the health care,
education and tourism industries. While Saudi Arabia
has emphasized its goal of diversification for some
time, current low oil prices may force the government
to make more drastic changes ahead of its long-run
timeline.
GDP per capita: $54,500 (2017 est.); inflation:
-0.9% (2017 est.); unemployment: 6% (2017 est.).
Currency: Saudi riyals (SAR): 3.75 riyals equal 1 U.S.
dollar (Jan. 21, 2020).
Exports: $221.1 billion (2017 est.): petroleum and
petroleum products 90% (2012 est.).
Imports: $119.3 billion (2017 est.): machinery and
equipment, foodstuffs, chemicals, motor vehicles,
textiles.
Agriculture: 2.6% (2017 est.) of GDP and 6.7% of
the labor force.
Internet: Code: .sa; 20,768,456 users.
Source: CIA World Factbook

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