Wheat consumption in Saudi Arabia to soar 25.9%
Posted by Zawya
The Saudi Gazette
12 June 2010


JEDDAH - Wheat consumption in Saudi Arabia is forecast to experience very strong growth of 25.9 percent, while production is expected to fall drastically, with output plummeting by 73.4 percent to 2014, according to a new market study by Business Monitor International (BMI).

The "Saudi Arabia Agribusiness Report Q3 2010" forecast that by the end of the period, Saudi Arabia will be overwhelmingly reliant on imported wheat with annual imports to be between 2.5 million and 3 million tons.

The report also said that with wheat import bill soaring, rising by an estimated 22 percent in 2010 alone, the government is looking for ways to cut costs.

Moreover, rice consumption is forecast to grow by 14.2 percent over the forecast period, with the rise mainly in line with population growth.

The report further said demand for rice, which is imported100 percent, "is fairly inelastic," due largely to the high levels of GDP per capita in the Kingdom, with increases and reductions in rice prices having little impact on demand.

Moreover, per capita dairy consumption in Saudi Arabia presently stands at around 54kg a year - a rate far higher than is typical in most developing countries, reflecting the importance of dairy products in the local diet.

With growth in domestic dairy production held back by the lack of pastures for grazing, milk production in the Kingdom is only forecast to increase marginally, by 1.3 percent year-on-year (y-o-y) in 2010, the report noted.

Poultry is very popular in Saudi Arabia and is a key component of the local diet, with the Food and AgriculturalOrganization estimating that the country ranks as one of the highest consumers of chicken per capita in the world.

By Querubin J. Minas

© The Saudi Gazette 2010

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