Saudi Arabia the Largest New Wheat Buyer in Global Market
After exporting virtually no wheat in the 1970’s, by the 1980s and 1990s Saudi Arabia produced enough wheat on irrigated, circular wheat farms that stretched across its desert to supply Kuwait, United Arab Emirates, Qatar, Bahrain, Oman, and Yemen. However, since exports peaked in 1992, wheat farms have disappeared in an effort to conserve what water remains in its Saudi Arabia's aquifers. Next year will be the first in which Saudi Arabia will need to rely entirely upon wheat imports.
"The Saudis are the largest new wheat buyer to emerge," said Swithun Still, director of grain trader Solaris Commodities SA in Morges, Switzerland.
In 2016, Saudi Arabia is set to import 3.5 million tons – a 10-fold increase, according to Ahmed bin Abdulaziz Al-Fares, managing director of the Grain Silos and Flour Mills Organization – Saudi Arabia’s state agency responsible for cereal imports. By 2025, Saudi Arabia is projected to become one of the world’s top ten wheat importing countries as population growth drives up imports to 4.5 million tons per year. The country is already the world’s biggest importer of barley which it uses as camel feed, and is a top-15 sorghum and corn importer.
Saudi Arabia impending dependence on wheat imports has been a boon for wheat exporting countries including Canada, Germany, Lithuania, and Latvia as the world is experiencing a global wheat glut. However, Saudi Arabia has not only increased imports, but has also turned to investing in overseas farmland and grain assets. In April of this year, Saudi Agricultural & Livestock Investment Co. (SALIC) partnered with Bunge to buy the former Canadian Wheat Board – now the G3 Global Grain Group, for C$250 million to secure a supply of grain exports from Canada.