Saudi Arabia has changed its wheat tender specifications to allow purchases from Australia, the world's fourth-largest shipper, Western Australian state Agriculture and Food Minister Terry Redman said.

 

The country lowered its protein requirements and ended a zero tolerance for the crop fungus Ergot, clearing the way for Australia to participate in tenders, Redman said today (Apr 23).

 

Saudi Arabia plans to stop growing wheat domestically by spring 2016, and import the grain instead, according to a USDA report in February. The nation's wheat-buying agency has approved the US, Argentina, the EU and Australia as shippers, the report said.

 

"They will be reliant on major reliable suppliers of wheat in the global market and Australia will at some point be one of those suppliers," said Tom Puddy, wheat marketing manager for CBH Group, Australia's biggest grain exporter.

 

Wheat for July delivery declined 0.8% to US$5.0675 a bushel on the Chicago Board of Trade at 4:47 p.m. Melbourne time. The futures have dropped 6.4% this year.

 

Australian shippers competed in a Saudi Arabia tender this month for 550,000 tonnes, with suppliers from Canada and Germany winning the business, Puddy said. A global glut of wheat this year has increased price competition.

 

"We may be able to get a couple of cargoes done by the end of the year, but if not I would say next year," Puddy said. "As production changes around the world, we should see ourselves starting to line up in there."

 

Saudi Arabia's Grains Silos and Flour Mills Organisation already toured Western Australia's grain production, research and storage facilities last month, according to the ministry.

 

The latest Saudi tender had a minimum 11.1% protein level compared with a minimum last year of 12.5%. The tolerance level for Ergot was raised to 0.045%.

 

The Middle Eastern country may import two million tonnes of wheat in 2010-11, according to a report last month by the USDA's Foreign Agricultural Service.