Saudi Arabia is investigating lower-quality wheat to cut down its bill for imports, which are set to surge 22% this year as the desert kingdom cuts back on domestic production to save water.
The Saudi Grain Silos and Flour Mills Organisation (GSFMO), the state grain import and processing agency, told US officials it was considering wheat with 12.5% protein as an alternative to the 14% it usually specifies.
"The GSFMO [said] it wanted to test domestic bakeries' and consumers' reaction to the wheat containing 12.5% protein," a report from the US Department of Agriculture's Riyadh bureau said.
"If no major quality complaint is received, the organisation may eventually move from the 14% protein requirement to 12.5% protein option to save cost on wheat imports."
'Not happy with wheat qualities'
The move comes amid a jump in Saudi Arabia's reliance on foreign wheat supplies after it turned off the taps for domestic irrigation for fear of depleting non-renewable underground aquifers.
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Saudia Arabia wheat dynamics, 2010-11 (year-on-year change)
Area harvested: 140 hectares (-30%)
Production: 700,000 tonnes (-30%)
Imports: 2.00m tonnes (+22%)
Consumption: 2.81m tonnes (+1.9%)
Year-end stocks: 1.98m tonnes (-5.3%)
Source: USDA attache report |
Domestic production will slide to 700,000 tonnes this year, a 30% slide on 2009's crop, and down 70% on the harvest three years ago, the bureau said.
Imports will rise 22% to 2.0m tonnes this year.
However, consumers have proved finicky over their choice of supplies, rejecting Russian and Ukrainian wheat in 2008 because of low protein content.
"Domestic bakeries were not happy with the wheat qualities from the two countries," the report said.
"As a result, GSFMO eliminated Russia and Ukraine from prospective wheat suppliers list for the foreseeable future."
Barley imports
The clampdown on the cost of wheat imports follows Saudi measures to cut back on imports of barley, of which the country ditched production subsidies seven years ago, cutting the annual harvest to about 25,000 tonnes from historic levels of about 200,000 tonnes.
The government has introduced subsidies for a broad selection of feeds, from alfalfa to rice hulls, noting that an animal fed overwhelmingly on barley digests only about 70% of the grain it eats.
Saudi Arabia believes the subsidy programme "will lead to a drastic reduction in the demand for barley imports in the long run", the report said.
The country last year imported 7.3m tonnes of feed barley, of which 54% was bought from Ukraine, with Australia providing 19% and Russia the third-ranked supplier with a 16% share.