Saudi Arabia to buy up to 700,000 tonnes of wheat per year from local farmers

RIYADH: Saudi Arabia's state grain buyer, the Saudi Grains Organization (SAGO), said on Sunday that it had approved the purchase of a maximum of 700,000 tonnes of wheat annually from local farmers for five years.

Saudi Arabia has become a major importer of hard and soft wheat since abandoning plans for self-sufficiency in 2008 because farming in the desert drained precious water supplies.

Farmers will be able to grow wheat on a maximum of 50 hectares of land, a statement on state news agency SPA said.

"Wheat prices for the coming agricultural season, 2018-2019, will be similar to the organisation's global import prices or at 1,250 riyals ($333) per tonne, whichever is higher. Prices will be reviewed after two agricultural seasons," the statement said.

SAGO imports Saudi Arabia's entire wheat supply of about 3.5 million tonnes a year.

It has said demand for wheat is expected to expand by an annual 3.2 percent to reach 4.5 million tonnes by 2025, largely due to population growth.