Saudi Arabia to import 3.5 million tonnes of wheat in 2016

[RIYADH] Saudi Arabia's main wheat-buying agency, the General Silos and Flour Mills Organisation (GSFMO), said it expected to import 3.5 million tonnes of wheat in 2016 as local wheat buying grinds to a halt.

The agency is on track to import 3.4 million tonnes of wheat in 2015, its Director General Ahmed al-Fares said in a presentation given at the Saudi-French business Forum in Riyadh on Tuesday and obtained by Reuters on Wednesday.

Saudi Arabia has become a major importer of hard and soft wheat since abandoning plans for self-sufficiency in wheat in 2008 as farming in the desert drained precious water supplies.

The country has been steadily reducing wheat cultivation and aims to be completely reliant on imports by 2016 to save water. Total purchases of locally produced wheat in 2015, the final year of local procurement, are expected to reach 420,000 tonnes, compared to purchases of 1.72 million tonnes in 2008 before the reduction plan began.

The country's demand for wheat is expected to grow at an annual rate of 3.2 percent to reach 4.5 million tonnes a year by 2025, the GSFMO said, largely due to population growth. Storage capacity currently stands at 3.1 million tonnes, enough to last Saudi Arabia for more than 10 months. GSFMO has said it would raise its wheat storage capacity to 4 million tonnes by 2020, about a year's worth of consumption.

REUTERS