Saudi Arabia 2010-11 wheat output seen down 30%

Saudi Arabia's wheat production is expected to drop 30% to 700,000 tonnes in the 12 months ending June 2011, from one million tonnes in the previous period, the USDA's Foreign Agricultural Service (FAS) said Friday (March 5).

The kingdom decided in January 2008 to reduce wheat production by 12.5% a year, abandoning a 30-year-old programme to grow its own, having achieved self-sufficiency but at the cost of depleting the desert kingdom's scarce water supplies.

It produced 1.72 million tonnes of wheat in the 12 months ending June 2009, according to USDA.

The Arab world's largest economy, a mostly desert country which imports the bulk of its food needs, is expected to import 2 million tonnes of wheat in 2010-11, compared with 1.64 million tonnes a year earlier, it said.

Saudi Arabia consumes around 3 million tonnes of wheat a year and has a policy of maintaining a quantity of wheat quantity equivalent to at least six months' domestic consumption as a reserve stock at any given time.

The current stock level at state-run General Organization for Grain Silos and Flour Mills is estimated at more than 2 million tonnes of wheat. The body has a plan to increase the wheat storage capacity from 2.5 million tonnes to 3.5 tonnes in the next few years.