World Grain - March 2024 - 16

COUNTRY FOCUS
with low fertility, high incidence of animal disease and pests
and water scarcity.
Saudi Arabia is a net food importing country but is selfsufficient
in some areas, including fresh milk, table eggs,
dates and vegetables. It is a net importer of wheat, barley, corn
and rice.
Crop production, consumption
Since 2018, farmers with less than 50 hectares of farmland can
voluntarily produce wheat. Before each planting season, farmers
choose between wheat or alfalfa and sell their product to the Saudi
Ministry of Environment, Water and Agriculture (MEWA).
Because farmers could make more growing alfalfa, wheat production
stayed below 1 million tonnes for several years.
" ... as long as government
purchase prices remain high,
domestic wheat production is
projected to remain near
1.2 million tonnes. "
US Department of Agriculture, Foreign Agricultural Service
A price of $466.70 per tonne set by the General Food Security
Authority (GFSA, formerly SAGO), an agency of MEWA
that purchases all locally produced wheat, resulted in a drastic
increase in domestic wheat production, the FAS said.
" Analysts indicate wheat farmers significantly increased
1,000
2,000
3,000
4,000
5,000
6,000
their profits this past year, and as long as government purchase
prices remain high, domestic wheat production is projected to
remain near 1.2 million tonnes, " the FAS said.
However, to meet domestic demand, Saudi Arabia must import
a significant amount of wheat. Currently, GFSA is the
exclusive importer of subsidized food grade wheat, but as
part of privatizing the import industry, the Saudi Agricultural
and Livestock Investment Co. (SALIC) will start taking over
wheat purchasing and operation of storage silos. SALIC is the
agricultural arm of the Public Investment Fund owned by the
country's sovereign wealth fund.
In 2023-24, SALIC is expected to supply up to 720,000
tonnes of wheat from Saudi Arabian companies operating
farms in foreign countries.
Domestic wheat consumption is estimated at 4.5 million
tonnes in 2022-23 and 4.7 million tonnes in 2023-24, with
a projected 3% increase annually. Wheat demand has been
increasing 5% to 10% per year due to the expanding foodservice
sector as hundreds of labor camps are being established
throughout Saudi Arabia to build mega projects, resorts and
tourist attractions.
In comparison, feed barley consumption dropped more
than 18% in 2022-23 to 3.8 million tonnes and is projected
to decline another 17% to 3.1 million tonnes in 2023-24. This
16
Imports
Saudia Arabia wheat situation
(in 1,000 tonnes)
1,000
2,000
3,000
4,000
5,000
6,000
Imports
1,000
1,200
200
400
600
800
1,000
1,200
200
400
600
800
Production
*Projected
Source: USDA Foreign Agricultural Service
represents a 56% decline compared to a decade ago when consumption
averaged 7 million tonnes, the FAS said.
The FAS attributes the drop to higher prices compared to
other animal feed alternatives; fewer operations as high prices
forced 30% of goat and sheep farmers to liquidate their
businesses; farmers desire for feed options that produce less
waste; and increased consumption of processed feed.
Barley imports are estimated at 4.1 million tonnes in 202223
and 3 million tonnes in 2023-24, a drop of 28%. Russia
is the sole supplier as Australia returned to the Chinese market
and Ukraine has been unable to ship to Saudi Arabia because
of the continued war with Russia. Saudi Arabia does
not produce feed barley but does produce 25,000 tonnes for
human consumption.
" As the local feed processing sector continues to expand and
livestock farmers benefit from different feed options, Post anticipates
barley imports will continue to decrease, " the FAS said.
Corn (maize) continues to be an important feed grain for
March 2024 / World Grain / World-Grain.com
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