Oil Price Slump Prompts Closure of Saudi Agriculture Trader
A slump in oil prices has prompted the closure of Tharawat Business, the agricultural commodities trader owned by Saudi prince Turki bin Salman, according to Bloomberg.
Economic growth in Saudi Arabia is expected to slow to 1.5% this year and is expected to climb to only 2% in 2017 – down from estimated economic growth of 3.5% for 2015 by Moody’s Investors Service.
Founded only in 2013, Tharawat was established with the goal of originating globally sourced food from efficient producers to be imported back to Saudi Arabia to help meet demand. The company was also tasked with buying up raw commodities as prices fell to multi-year lows. However, oil prices have fallen by more than 50% over the past three years as supplies from increased U.S. production of shale energy, and the unwillingness of Middle Eastern countries including Saudi Arabia and Iraq to dial back production combined to create a global glut.
"Now is the time to buy commodity assets," Carlos Murilo Barros de Mello, CEO of Tharawat Business told Bloomberg. "But the shareholder’s strategy has changed."