RIYADH: The Saudi Grains Organization has awarded the Saudi Agricultural and Livestock Investment Co., also known as SALIC, a contract to import 300,000 tons of wheat from November 2022 to January 2023.
The cargo constitutes the second batch of wheat purchased from Saudis who invested in agricultural assets abroad, according to the Saudi Press Agency.
Contracts for the final batch will be awarded in July.
SAGO Gov. Ahmad Al-Fares explained the amount awarded represents 20 percent of the total amount allocated to investors abroad.
Owned by the Public Investment Fund, SALIC was established in 2011 to secure food supplies for the Kingdom.
SAGO is working to finalize long-term contracts — no less than six months — to ensure there is no shortage of grain supplies, Al-Eqtisadiah quoted an official as saying.
Khaled Al-Mashaan, director of institutional communication, told the newspaper that the Kingdom’s wheat supplies will not be affected by the ongoing Russia-Ukraine conflict.
Under normal circumstances, the Saudi authorities ensure that the strategic stocks of this commodity are not less than four month but in light of the current global situation, the grains organization is taking measures to enhance the strategic storage of wheat.
Al-Mashaan said the storage capacity of the established wheat silos amount to about 3.5 million tons, which is equal to the Kingdom’s annual consumption. He said SAGO also procures wheat from local farmers.
However, there are certain conditions, Al-Mashaan added. He said the qualified farmers should grow wheat for five years and a maximum of 1.5 million tons per year at prices determined by the grains organization set in accordance with the international markets.
The official said so far SAGO has purchased more than 250,000 tons of wheat from local farmers. In addition, the organization also procures about 700,000 tons from Saudi investors abroad.
He said the purchase price of local wheat for this season will be SR1,700 ($453) per ton.
