To ensure food security, the government of Saudi Arabia asked its grain trader SAGO to buy wheat from Saudi investment companies abroad. Monday saw the first purchase of 60,000 tons of wheat from the investor SALIC.
The Gulf States depend on around 80 - 90% of food deliveries from abroad. They have invested a lot of money to buy tens of thousands of acres of cheap farmland and other agricultural assets abroad to achieve food security for the coming decades.
Saudi Arabia, the world's largest crude oil exporter, has repeatedly urged its citizens to buy farmland abroad, but without measurable success. That changed this week with the purchase of Ukrainian wheat now. There are no official statements on this.
On April 6, the Saudi government asked private investors to source up to 10% of national annual grain imports abroad. That would be 355,000 tons of wheat, which the private sector should procure. In addition, the state's beef reserves are also to be increased after the corona virus has interrupted the world's value chains.
Ukrainian wheat with 11-12% protein, which the investment company SALIC bought, costs USD 248 / ton and is scheduled for delivery in September. The recipient is the state grain purchaser SAGO, who is open to further offers.
Source
Hansa Terminhandel GmbH
