March 9, 2010

Saudi Arabia mulls lower quality wheat to cut import bill

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.

According to the USDA Riyadh bureau, the GSFMO wanted to test domestic bakeries' and consumers' reaction to the wheat containing 12.5% protein. 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.

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.

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. However, imports will rise 22% to 2.0m tonnes this year.