Saudi to remain reliant on food imports

Saudi Arabia has admitted it would not be able to achieve self-sufficiency in most farm products and would remain heavily reliant on food imports.

The Gulf Kingdom’s minister of agriculture Fahd bin Sulaiman Balghunaim made the surprise comments during a press conference ahead of a local agriculture exhibition and conference in Riyadh.

Balghunaim said Saudi Arabia, the world’s richest nation in oil but one of the poorest in water, is doing its best to meet local needs in some farm products but added it would not be able to achieve full self-sufficiency.

He told Saudi newspapers that the Kingdom is recording one of the highest population growth rates, adding that this would require more food imports.

“Water resources in the Kingdom are limited and this means we will not be able to locally produce all the farm products which we need,” he said.

“To be realistic, I do not expect Saudi Arabia to be able to cover all its food needs with its present population growth and living standards…we cannot achieve complete self-sufficiency and this means we will remain reliant on imports.”

Balghunaim said poor water reserves in the Kingdom, which controls over a fifth of the world’s proven oil deposits, had prompted it to gradually stop local wheat and barley production, adding that alternative plans involve increasing imports and investing in farms in Sudan and other fertile countries.

His figures showed Saudi Arabia consumes nearly three million tonnes of wheat per year, around 10 million tonnes of fodder and one million tonnes of rice. “This means that we should concentrate our overseas farm investments on wheat and fodder not on rice…but we still aim to meet part of our needs of rice.”

He said the Saudi government no longer encourages the local cultivation of wheat and barely as it prefers to rely on imports because they drain the country’s financial and water resources. He referred to the government’s decision to stop wheat and barely production and compensate farmers for their losses.

Saudi Arabia is already the largest Arab importer of farm products, which exceeded SR65 billion in 2009, according to official data.

The import value is expected to have surged last year and in the coming years because of high population growth and a decision to halt local wheat production.

“In 2009, the value of food imports by Saudi Arabia peaked at SR65.25 billion as a result of a steady population growth, which is estimated at three per cent, as well as economic growth and high per capita income,” said Khaled Daou, director of an international farming exhibition staged in Riyadh in October.

“We expect a further increase in demand for food in the coming five years because this growth and the increase in the number of visitors, which exceeded 10 million last year…another factor is the expected rise in the number of foreign workers needed for the growing number of projects.”

Daou said there are forecasts Saudi Arabia’s population would grow by nearly 15.4 per cent in the next five years from the present level of 27 million.

“This means that we will see an increase in the food import value and an intensified drive to achieve food security in the Kingdom,” he said.

Saudi Arabia is the largest Arab food importer given its rapid population growth and poor arable land as it is mostly a desert. Last year, the Kingdom’s farm imports accounted for nearly 45 per cent of the total Arab food imports of about $39 billion (SR143 billion), according to the Arab League.

Jolted by a surge in global food prices in 2007 and 2008, Saudi Arabia has turned abroad to ease reliance on farm imports by investing in agricultural projects in Sudan and other fertile countries.

But analysts believe such projects would not have a strong downward impact on imports as they will be offset by Riyadh’s decision to halt local wheat production and rely on foreign imports to preserve its dwindling water wealth.

“There is no doubt this decision will only aggravate the Kingdom’s food import bill as the plan is to rely totally on imported wheat,” a Riyadh-based economist said.

Saudi Arabia had produced nearly three million tonnes of wheat per year to meet domestic needs but output is expected to have plunged to one million tonnes in 2010 following the government’s decision to stop subsidizing local production.

In the next two years, output could dip further and the country will become almost totally reliant on imports, mainly from the West.

“The decision we took two years ago to halt local wheat output is final and clear……there is no going back,” Balghaneem said.

“The country is now giving priority to water security over food security…this was a cabinet decision, which also directed us to stop producing wheat locally.”

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