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GCC spending on food imports seen to reach $49 billion by ’20

Last updated: Wednesday, July 11, 2012 3:31 PM


 JEDDAH — GCC countries’ aggregate spending on food imports is projected to reach $49 billion by 2020, the Economist Intelligence Unit said. If the GCC presses ahead with investments in agriculture overseas, it could potentially give a significant boost to agricultural production in poor countries. GCC states might also be able to supply these countries with cheap fertilizers at cost price, the report said.

The GCC would be competing with China and India for land in Africa in 2020 — and that GCC countries will need to lease fishing rights overseas, as world fish stocks plummet and as Gulf waters struggle with increasing salinity, the report added.


GCC government and private investors explored wide-ranging purchases of agricultural land all over the world — in Africa, Central Asia, Southeast Asia, Eastern Europe and other areas - to ensure future food security. It appears virtually certain that the GCC will become more dependent on imported food due to water scarcity, which means that domestic agricultural production tends to be costly. Notably, Saudi Arabia has announced that it will phase out domestic wheat production by 2016 in order to save water.


Separately, the US Department of Agriculture Global Agricultural Information Network said that in 2012/2013, Saudi Arabia wheat production is forecasted to decline by 9 percent to one million metric tons (MMT) compared to 1.1 MMT of MY 2011/2012 level.


Saudi Arabia’s total MY 2012/2013 wheat import is forecasted to reach 2.5 million MT due to the increased feed quality wheat imports for animal consumption.


Saudi Arabia’s barley imports for 2012/2013 is forecasted to decrease by 9 percent to 6.5 million MT compared to 7.2 million MT in 2011/2012.


This is mainly due to the expected increase in feed grade wheat imports. Saudi rice import for 2012/2013 is forecasted to reach about 1.1 million MT which is an increase of three percent compared to 1,068 thousand MT of 2010/2011 import level.


GSFMO, the Saudi government agency which is responsible for purchasing wheat, milling and distribution of wheat flour domestically, said Saudi Arabia’s total MY 2012/2013 wheat import is forecasted to reach 2.5 million metric tons of which 1.8 million metric tons is imported by GSFMO for human consumption. GSFMO imports food wheat through international wheat import tenders that are sent by fax directly to major wheat exporters who are registered at GSFMO.


GSFMO has been importing wheat with 14 and 12.5 percent protein content at seller’s option mostly from EU, Canada, US and Australia. However, GSFMO has occasionally received some high quality wheat shipments from Brazil, Argentina, Latvia and Lithuania.

Since MY 2011/2012, MOF and some domestic animal feed processors have been imported feed quality wheat with up to 11 percent protein content. — SG

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