Bloomberg News

Saudi Arabia Wheat Output Seen Dropping 10% by UN on Phase Out

May 20, 2013

Saudi Arabia’s wheat crop may decline 10 percent this year as the government moves to phase out domestic production, the United Nations Food & Agriculture Organization said.

The wheat harvest may drop to 700,000 metric tons, down from 780,000 tons in 2012, the Rome-based FAO said in a country report on its website dated May 17. Saudi Arabia has planned to cut production by 12.5 percent annually in order to eliminate domestic output by 2016, in an effort to conserve water. The country will increase its grain storage capacity of 2.52 million tons by 30 percent during the next three years with the goal of maintaining enough stockpiles to cover a year’s worth of consumption, the FAO said.

“In light of decreasing domestic production, strong domestic demand and environmental concerns, Saudi Arabia is encouraging agricultural investments abroad and re-exporting products to Saudi Arabia,” the FAO said. “This initiative targets wheat, rice, barley, yellow corn and green forage.”

Grain imports in the 2012-13 marketing year that began July 1 may be about 13 million tons, down from 14.8 million tons in the previous season, while still the second-highest in at least six years, the FAO said. Barley imports will be 7.5 million tons, wheat will be 2.2 million tons and corn 2.1 million tons. Rice purchases will be 1.3 million tons.

To contact the reporter on this story: Whitney McFerron in London at wmcferron1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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