Saudi Arabia will probably hedge against fluctuating world wheat prices after announcing plans to diversify its sources of imports, the U.S. Department of Agriculture’s Foreign Agricultural Service said.
Wheat will be procured through “transparent international tenders” without relying on any particular supplier, the FAS said, citing the Saudi Grain Silos and Flour Mills Association, the sole buyer of wheat in the country. Since resuming wheat imports in 2008, Saudi Arabia brought in about 10.5 million metric tons from the European Union, Australia, Brazil, Argentina and the U.S., FAS said.
Saudi Arabia imported 2.32 million tons of milling wheat since July, and shipments will total 3.2 million tons for the July-March year, the FAS said. The country has storage capacity for about 2.52 million tons, or enough to cover demand for six months, it said.
Wheat production in the country is estimated by FAS at 625,000 tons, down 11 percent from last year, it said. “The continuing decline in Saudi wheat production reflects the Saudi government’s determination to enforce the implementation of policy started in 2008 to phase out domestic wheat production by 2016,” the FAS said.
(Source – http://www.blackseagrain.net/novosti/saudi-arabia-seen-by-usda-unit-hedging-wheat-fluctuations)