Saudi Arabian Farmers Exit the Industry Due to Barley Prices
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Saudi Arabian feed Barley consumption for MY 2021/22 was estimated at 5.4 MMT, down 13 percent from USDA’s estimated 6.2 MMT. While there was no definitive explanation for the significant decrease in local Barley consumption this marketing year, most experts attribute it to the mass exodus of local farmers from the livestock industry. Some contacts believe that many local livestock farmers exited the profession due to increasing Barley prices mixed in with a low fixed Government monthly cash payment to farmers.
Others say demand is low because of the continued exit of recreational farmers, who usually keep a few hundred sheep or goats, but depart due to higher farming costs. However, other experts believe demand is down because farmers reduce waste, thus buying less Barley. A 50 kg of Barley was sold for $19.32 inclusive of the 15 percent VAT at packing terminals in February 2022, while the same quantity was sold for $15.74 in August 2021.
Various experts indicate that the increase in domestic Barley prices has forced many smaller livestock producers (goats and sheep) to leave the industry. As a result, ARASCO has maintained the wholesale price of its 50-kg bag of “Wafi” compound feed at least 8 Saudi Riyal (SAR), or $2.13 USD, below the price of Barley of the same weight.
The National Shipping Company of Saudi Arabia Bahri’s tanker ‘Sara’ arrived at the Jeddah Islamic Port in February with 60,000 tons of Barley as the Government and private sectors cooperate in Saudi Arabia to ensure food security. The tanker came from the Australian port of Bunbury after the Agricultural Development Fund financed the supply contract between Mansour Al-Mosaid Company and the Saudi Agricultural and Livestock Investment Company (Salic).
Bahri CEO Eng Ahmed bin Ali Al-Subaey said: “Providing staple grains such as Barley, wheat, and corn to Saudi Arabia is one of our greatest accomplishments as part of the supply chain. The modern tanker carrier Sara is one of the several ships added to Bahri’s cargo fleet to meet customers’ needs in the Kingdom and the region, as well as Saudi companies seeking to import these important commodities. This will enhance food security, one of the main objectives of Saudi Vision 2030.”
Salic Group CEO Eng Sulaiman bin Abdulrahman Al-Rumaih said: “This is an important milestone in local food security since efforts have been integrated between three national companies as per Vision 2030 objectives.” Ahmed bin Mansour Al-Sudairy, Chairman of Mansour Al-Mosaid Company, said: “Over the past forty years, Mansour Al-Mosaid Company has played a key role in importing and trading Barley in Saudi Arabia, and we are delighted to cooperate with two of the kingdom’s largest companies.”
According to Al-Rumaih, Salic, through its global investments, contributed to achieving the national food security goals by receiving over 1.3 million tons of commodities and products in the kingdom during the year 2022. Munir Bin Fahd Al-Sahli, General Manager of the Agricultural Development Fund, said: “The funding comes as part of its efforts to support and develop the agricultural sector, strengthen and stabilize the food security system, contribute to boosting supply chains, and compensate for any shortages which may occur.”
Saudi Arabian Barley Import
As per AgFlow data, Saudi Arabia imported 265,378 tons of Barley from Australia in Q1 2023, followed by Germany (66,000 tons). In 2021, Saudi Arabia imported Barley worth $1.29 billion, becoming the world’s 2nd largest importer of Barley. The same year, Barley was the 17th most imported product in Saudi Arabia. Saudi Arabia imports Barley primarily from: Australia ($746 million), Russia ($256 million), Ukraine ($72.4 million), Germany ($65.5 million), and Romania ($57.5 million).
Other sources: ZAWYA
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