SAGO, Saudi Arabia’s state grain buyer, has purchased 60,000 tonnes of Ukraine wheat from the Saudi Agricultural and Livestock Investment Company (SALIC).
Formed in 2011 SALIC has invested into farmland globally in order to produce and secure food for the Kingdom of Saudi Arabia (KSA). SALIC is 100% owned by the Public Investment Fund (PIF) of Saudi Arabia and is focussed on food security. The export trade with SAGO is expected to be the first of many as KSA aims to import 10% of local needs this year, the equivalent of 355,000 tonnes.
Food security has been a priority in recent weeks for many nations as Covid-19 lockdowns have up-ended supply chains.
On April 16th following concerns within the industry, Romania reversed the decision to suspend grain, oilseed, and related-product exports to non-EU markets. Industry organisations voiced their fears that Romania would lose its reputation as a reliable global grain supplier. Despite only lasting a week the national policy change underlines the concerns Governments have over food security.
Russia, which has suffered an 18% currency devaluation since 31st January 2020 causing wheat prices to become extremely competitive on world markets – but has now fulfilled its 7mmt grain export quota set just a few weeks ago by Government.
Agri-Business Consultant Adam Oliver, based in Poland, commented “supply chains around the world are under pressure despite what many Governments are telling us. This ranges from 12 major US meat plants being closed to producers in Germany, France and the UK being dependent on cross border flows of labour to harvest high value fruit and vegetables. As a result, many producers are seeking to recruit local students and people laid off from the hard hit hospitality industry – but this is not easy. On top of this we have extremely dry conditions across large parts of Europe – adding further pressure to what was already an extremely challenging situation. Food prices, at least in the short term are likely to moving in one direction”.
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