Saudi Arabia to stop wheat production by 2016

The minister was speaking on the sidelines of the two-day International Grains Forum

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The newly appointed Minister of Agriculture Waleed Al-Kuraiji said Tuesday that the Kingdom will rely completely on imported wheat starting from 2016.

He added that the Kingdom’s wheat import has increased from 300,000 in 2008 to 3 million tons by the end of this year. This makes the Kingdom number six on the list of top countries importing wheat.

The minister was speaking on the sidelines of the two-day International Grains Forum that opened Tuesday at the Jeddah Hilton.

The Kingdom was able in 2008 to produce over 2 million tons of wheat however it soon rejected this self-sufficiency project due to its negative affect on its water resources. In this context, the minister said, “the Kingdom has been undergoing a strategic move for the past seven years to conserve water, therefore we head to international markets to import products that are water consuming, on top of which is wheat.”

Starting from 2008 the Kingdom reduced its production of wheat by an annual rate of 12.5 percent, said Al-Kuraiji.

The global grain market is fluctuating he elaborated. However the world’s production of wheat will hit 713 million tons this year. Further the corn production will be 980 million tons by this year. He noted that the unstable grain prices would reflect on the prices of milk products.

The minister added that both the private and public sectors are now working on preserving a stock of food to combat any challenges that might occur due to relying on international markets. The new plan is to make a year stock for wheat instead of the current plan that preserves wheat only for six months.

In this context, Alan Tracy, president of the US Wheat Association, called on the establishment of a Global Wheat Food Security Initiative. This initiative, she said, is crucial noting that wheat is the most planted and traded grain. This will provide “genuine food security to world’s wheat importers,” she added.

For the initiative to achieve its goals, there must be no export or import taxes, no state trade enterprises, and no embargoes. Further, there should be a limit to trade that distorts domestic subsidies, ad the need to insure transparency.

Hans van der Beek, the Agricultural Counselor for GCC Ministry of Economic Affairs and the Netherlands Embassy, addressed in his speech the need to focus on Africa to provide food security to the world.

This approach, if achieved, will provide food security especially for countries that lack lands or water recourses. Africa, he noted, can provide lands and yield improvement.

However, investors seeking Africa need to listen to farmers, insure that there will be no displacement and that farmers will benefit from the deals.

Among the top investing countries are the US, UK, UAE, KSA, Malaysia, Singapore, India, Netherlands, and Hong Kong. The top targeted African counties for agricultural investment are Sierra Leone, Liberia, Congo, Mozambique and South Sudan. Other targeted countries include Brazil, Indonesia, Papua New Guinea, and Ukraine.

This article was first published in the Saudi Gazette, Dec. 11, 2014.

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