Saudi Arabia to build up wheat stocks

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WHEAT STOCKS: Official says Saudi Arabia plans to build up wheat supplies. (Getty Images)

Saudi Arabia expects to import up to 800,000 tonnes of milling wheat in the year to September 2009 as it seeks to build up stocks while it scales back domestic wheat farming, a grains authority official said on Monday.
 
Saudi Arabia's state-controlled Grain Silos and Flour Mills Organisation (GSFMO) plans to issue a tender in April or May for the purchase of 200,000-300,000 tonnes of milling wheat after it tendered last week to buy 500,000 tonnes of milling wheat, the official told newswire Reuters.
 
"The goal is to constantly have stocks that will be large enough to cover a minimum of four months of needs and a maximum of six months," the official said on condition of anonymity. He asked not be named because he is not allowed to talk to media.
 
Saudi Arabia, previously self-sufficient in wheat, announced earlier this year it would start importing supplies and scale back domestic production to save precious water.
 
The country will start reducing purchases of wheat from local farmers by 12.5 percent per year from this year, abandoning a 30-year programme to grow wheat which achieved self-sufficiency but depleted the desert kingdom's scarce water supplies.
 
GFSMO is seeking to buy 500,000 tonnes of milling wheat, the authority official said, confirming what European traders told Reuters last week.
 
He said shipments would be between February and June 2008, declining to give more precise dates.
 
"We are not in a hurry. Right now, our stocks of wheat are at about 1.3 million tonnes which is enough to cover six months of domestic needs," he said.
 
"Once the delivery of this tender's 500,000 tonnes is completed, the harvest season will start here which will keep our stocks at the level we are targeting," he added.
 
The official said the kingdom may snub Russian origins in the planned 500,000 tonnes purchase after a recent 50,000 tonnes purchase of Russian wheat disappointed local millers.
 
"We have received many complaints from millers and bread-making plants about this batch... It had a very low protein rate. It did not match the quality criteria that we were promised we will get," he said. (Reuters)

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