Saudi Arabia, whose phasing out of wheat production subsidies
has turned it into a major importer of the grain, may become a major buyer of
forage too, in a drive to further conserve scarce water resources.
Saudi Arabia may reduce import restrictions on forage crops in
an effort to stem their growing popularity among domestic farmers – who have seized
on them as an alternative to the wheat of which output is to be phased out
completely by 2016.
The country is set for a 700,000-tonne crop this year - the lowest
in 30 years - as its efforts to ditch domestic production of the grain, to save
water, bear fruit, the US Department of Agriculture's Riyadh bureau said.
The kingdom, which relies on irrigation, largely from
non-renewable reserves, for all its wheat output in the 1980s paid farmers six
times the global price for growing wheat, helping output grow above 4.0m tonnes
by the early 1990s.
However, farmers have responded by growing fodder crops
instead – many of which consume more water.
"Many Saudi farmers switched from wheat cultivation to
producing forage crops, such alfalfa and Sudan grass, which consume three times
the amount of water needed for wheat production," the USDA bureau said in a
Farmers planted 187,000 hectares with forage crops in 2011,
some 24% more than in 2007, before the country began its campaign to curtail
"The Saudi government is considering issuing a new decree to
phase-out forage production, open the importation of forage crops," the report
The bureau estimated the market at 4m tonnes, representing a
potentially huge market.
In hay, the US is the world's top exporter, with volumes of
some 3m-4m tonnes, with Australia second place, with levels typically roughly
The bureau's comments came as it forecast at 2.7m tonnes
Saudi Arabia's wheat imports in 2013-14, a rise of 38% year-on-year, if 200,000
tonnes below the record set in 2011-12.
The recovery in volumes will be fostered by, besides a
weaker domestic harvest, prospects of better crops in the Black Sea, the
country's primary source of feed wheat, whose poor production last year
prompted Saudi Arabian buyers to switch to buying in extra barley.
Some 500,000 tonnes of feed grain demand are seen switching
back to wheat from barley, adding to the 2.2m tonnes estimated as necessary for
Canada, Germany and the US have historically been major
suppliers of milling wheat to Saudi Arabia, although all three have been
eclipsed so far in 2012-13 by Lithuania and Poland.
Saudi Arabia has this season ordered its first soft wheat
imports, for food use, in more than three decades.
Saudi Arabia's efforts to save water are being fuelled by
population growth which is supporting demand for water, and requiring supplies to
be met increasingly from expensive desalinated supplies.
The desert kingdom's largest bank, National Commercial Bank,
earlier this month said that demand for desalinated
water had being rising by more than 6% a year, more than twice the rate of population