Saudi Arabia Sources Wheat From 5 Continents


Nov 15, 2022 | Agricultural Markets News

Reading time: 2 minute

The Saudi Grains Organization (SAGO) projected MY 2021/2022 (July 2021 – June 2022) domestic Wheat production at 700,000 metric tons (MT). SAGO anticipates domestic production will reach at least 1 MMT in MY 2022/2023 to offset expected import delays from Russia and Ukraine due to the ongoing war. Even though SAGO would like to see local Wheat production reach 1.5 MMT, many anticipate it is impossible this year due to numerous economic factors. However, the recently increased Government purchase price (GPP) is expected to increase domestic Wheat production in MY 2022/2023.

The Wheat production areas were reviewed using an average yield of approximately 6 MT per hectare (HA) for the last two years. In Saudi Arabia, Wheat is planted at the end of November to the second week of January, and it is delivered to SAGO from April to October. SAGO purchases all locally produced Wheat at a set competitive price adjusted annually. SAGO estimated that Saudi Arabia would produce 700,000 MT of Wheat in MY 2021/2022, but various experts believe production could be much lower since farmers prefer to plant alfalfa than Wheat. When partial local Wheat production resumed in MY 2018/2019, the Saudi Government set a maximum production limit of 700,000 MT, but in the 2020/21 crop year, SAGO increased the maximum local Wheat production cap to 1.5 MMT per year until MY 2022/2023.

However, it has been difficult for SAGO to convince local farmers to produce Wheat at the maximum set production level since alfalfa is more profitable than Wheat. Alfalfa produces for up to three years and yields between 6 – 9 cuts a year depending on planting region and weather conditions. As a result, farmers typically make more money producing alfalfa than Wheat. Many experts believe farmers prefer growing alfalfa. Because growers have more experience and knowledge with alfalfa than Wheat. Alfalfa is more profitable since it produces multiple cuts for up to three years per planted seed. Currently, locally produced alfalfa is sold at more than $300 per MT. The Wheat crop is thoroughly irrigated, but cooler temperatures and cloudy weather during most growing seasons significantly reduce Wheat yields.

Currently, in Saudi Arabia, Wheat is produced by small farmers on 50 HA of land, and most farmers have enough expertise in Wheat production. If needed, Saudi Ministry of Environment, Water, and Agriculture (MEWA) could enlist the country’s large commercial farmers equipped with technical expertise and the latest farming technologies to help drastically increase local Wheat production. While MEWA licenses local Wheat production, SAGO is the exclusive buyer of licensed production.

Traditionally, Saudi Arabia grows a hard-winter variety known as “Yecoro Rojo,” which was developed by the International Maize & Wheat Improvement Center in cooperation with the Mexican Ministry of Agriculture in Mexico. SAGO prefers Saudi Wheat to imported Wheat due to its hard kernel and lower moisture content, which allows for extended storage times.

Saudi Arabia Sources Wheat From 5 Continents

Saudi Wheat Consumption and Import

Estimated MY 2020/2021 Saudi Wheat consumption was at 3.5 MMT based on data provided by SAGO. According to SAGO, no Wheat is used as animal feed in the Kingdom. All Wheat, both imported and locally grown, is exclusively used for human consumption. It is illegal to feed food Wheat to livestock since the Government provides monthly payments to livestock farmers to help reduce their animal feed expenses.

According to AgFlow data, Russia led their Wheat import market with 1.5 million tons in 2021-2022, followed by Ukraine (0.7 million tons), Australia (0.1 million tons), Germany (0.1 million tons), and Brazil (0.1 million tons).


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