December 6, 2011

Saudi Arabia buys 330,000 tonnes wheat

About 330,000 tonnes of wheat at an average price of US$286.45/tonne, cost and freight basis, have been purchased by Saudi Arabia's state-run Grain Silos and Flour Mills Organisation (GSFMO).

The wheat is of 12.5% protein content and will be sourced from EU, Australia, the US, Canada and Argentina, the GSFMO said.

Earlier this year, GSFMO said Saudi Arabia planned to raise its wheat reserves to the equivalent of one year's supply from six months at present, as proposed last year by the Shura council, Saudi Arabia's top advisory body. The kingdom, which consumes around three million tonnes a year of wheat, currently holds stocks of about 1.4 million tonnes.

The GSFMO plans to increase its wheat storage capacity by 550,000 tonnes in four cities over a three-year period. The kingdom's storage capacity currently stands at just over 2.5 million tonnes.

Saudi Arabia, a mostly desert country that imports the bulk of its food, decided in January 2008 to reduce domestic wheat (http://) production by 12.5% a year--abandoning a 30-year-old programme to grow its own supplies, having achieved self-sufficiency at the cost of depleting the kingdom's limited water supplies.