Saudi Arabia is among the importing countries hit by disruption to Ukraine and Russia’s grain exports and surging prices of wheat and other commodities.
Saudi Arabia maintains at least 6 months of stock for various grain products to overcome any food shortages.
Al-Fawzan ( Deputy Governor-Saudi Grains Organisation),”Saudi Arabia’s wheat storage capacity amounts to 3.5 million tonnes, distributed across 14 branches in the kingdom.” As per him, a project is being launched to construct silos in NEOM city to enhance the kingdom’s storage capacity. The storage capacity of the silos is to be around 120,000 tonnes. Saudi Arabia has strategic storages for 8 commodities, including wheat, soybean and corn.*
Saudi Grains Organisation (SAGO)’s And Local Wheat Procurement
SAGO is located in Riyadh, is part of the grain and oilseed milling industry and is Saudi Arabia’s main wheat buying Agency. As per SAGO, the organisation deposited SR33.7 million ($8.9 million) to 49 local farmers who supplied wheat quantities allocated for this season.
The payment constitutes for purchasing 19,266 tonnes of wheat as the 13th batch. SAGO noted that the total amount spent in the season reached SR783.7 million. Further, SAGO paid SR21.8 million($5.8 million) to 27 local farmers for an amount of 12,448 tonnes as the 14th batch and spent a total amount of SR805.6 million. The organisation will continue to receive local wheat from farmers till the end of October 2022.*
SAGO issued a fourth tender to import as much as 535,000 metric tonnes of wheat to be brought in for the time period between November 2022 and February 2023. The tender calls for 9 shipments distributed as:
2 ships (60,000 tonnes each) set to arrive at Jeddah Islamic Port, 3 ships (60,000 tonnes each) to Yanbu Commercial Port, 3 ships(60,000 tonnes each) to King Abdul Aziz Port in Dammam and another ship(55,000 tonnes) to the port of Jizan.
The wheat grain sought through the tender through the 9 cargos would be of hard wheat with 12.5% protein.** The organisation’s plan to issue the tender comes to maintain the strategic stocks of wheat and to meet the demands from the milling companies as per Al Fares,Governor of SAGO.
The tender document said that the deadline for submissions of price offers was Friday (16thSeptember’22).*** 24 global companies have expressed interest in carrying out the transaction.*
Saudi ports will continue to receive the contracted shipments until the end of February 2023 (10thNovember,2022 to 25thFebruary’23) and Wheat will be imported from Europe, North and South America, Australia and the Black Sea region.
SAGO has already started to receive local wheat from farmers for the 2022 season to be procured till the end of October. The recently increased Government Purchase Price(GPP) is expected to increase domestic Wheat Production in 2022-2023. All wheat, both imported and domestic is used for consumption.
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