Saudi Arabia Agribusiness Report Q2 2016
BMI View: Saudi Arabia will increasingly be dependent on grains imports, as the country has decided tophase out domestic grains production in a bid to preserve the country's water supply. The government hasnot abandoned its strategy of self-sufficiency in poultry and has been ramping up incentives to expandproduction capacity. This strategy has paid off, as the three major producers in the sector have all startedheavy investment initiatives. We believe Saudi Arabia will find sufficient grains supply from the Black Searegion and the EU to supply its meat and food processing industry in the coming years. However, thecountry will remain highly vulnerable to volatile grains and feed prices. Recent spikes in feed prices haveturned us more cautious on margins for dairy and livestock producers in the country, especially those thatimport inputs from abroad.
Wheat production growth to 2019/20: -93.3% to 30,000 tonnes. Wheat production will be almostcompletely phased out in the coming years and Saudi Arabia will become entirely dependent on importsfor its grain needs.
Beef consumption growth to 2020: 14.7 to 236,500 tonnes. Beef consumption will not grow as fast aspoultry in the coming years, as beef meat remains more expensive than chicken. However, the expansionin GDP per capita and population will support a moderate increase in beef demand.
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