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Saudis to start growing rice in Thailand by the end of 2008
(Reuters) 10 May 2008
DUBAI — Saudi Arabia, one of the world's top rice buyers, is likely to start investing in rice farms in Thailand by the end of 2008 in a move to boost security of food supply, industry sources and traders said yesterday.
"A number of private companies and Saudi officials already met last week with Thai investors to discuss possible partnerships," said a Gulf industry source. "Those interested will be looking at meeting domestic demand and then exporting to neighbouring Gulf Arab countries, mainly the UAE," he told Reuters.
India, the world's second-biggest rice exporter in 2007, banned all non-basmati rice shipments in March, one of a series of protectionist measures worldwide that triggered a wave of panic buying, causing benchmark Thai prices to nearly treble.
Last year Saudi Arabia imported 960,000 tonnes of rice, making it the world's sixth biggest rice importer, according to U.S. Department of Agriculture data.
Around 70 per cent of the kingdom's rice imports were basmati rice, while Thai rice accounted for 10 per cent, traders said.
Saudi Arabia's cabinet on Monday approved plans to coordinate state and private sector activities, and to increase Saudi investments overseas in fisheries, livestock and food production.
"Saudi Arabia is trying to get companies investing together in rice farms in Thailand, and they are aware that companies here do not want to invest independently," one dealer said.
http://www.afet.or.th/v081/english/news/commodityShow.php?id=580
Saudi may start growing rice in Thailand by end '08
May 9, 2008
By Summer Said
DUBAI, May 9 (Reuters) - Saudi Arabia, one of the world's top rice buyers, is likely to start investing in rice farms in Thailand by the end of 2008 in a move to boost security of food supply, industry sources and traders said on Friday.
"A number of private companies and Saudi officials already met last week with Thai investors to discuss possible partnerships," said a Gulf industry source, who asked to remain anonymous.
"Those interested will be looking at meeting domestic demand and then exporting to neighbouring Gulf Arab countries, mainly the United Arab Emirates," he told Reuters.
India, the world's second-biggest rice exporter in 2007, banned all non-basmati rice shipments in March, one of a series of protectionist measures worldwide that triggered a wave of panic buying, causing benchmark Thai prices to nearly treble.
Last year Saudi Arabia imported 960,000 tonnes of rice, making it the world's sixth biggest rice importer, according to U.S. Department of Agriculture data.
Around 70 percent of the kingdom's rice imports were basmati rice, while Thai rice accounted for 10 percent, traders said.
Saudi Arabia's cabinet on Monday approved plans to coordinate state and private sector activities, and to increase Saudi investments overseas in fisheries, livestock and food production, state-owned Saudi Press Agency reported on Monday, without identifying any countries.
"Saudi Arabia is trying to get companies investing together in rice farms in Thailand, and they are aware that companies here do not want to invest independently," one dealer said.
"We are expecting a decision to be taken before the end of 2008, and most likely this decision will be a yes," he said.
The rising price of staples like rice -- called a "silent tsunami" by the World Food Programme -- has sparked violent protests from Haiti to Somalia, and heightened fears that the world's poor may soon struggle to feed themselves.
Many countries have responded to the high prices by imposing taxes and other restrictions on exports -- allowed under World Trade Organisation rules -- to try to ensure adequate domestic supplies.
TASTE CHANGE
The population of the desert kingdom, the world's largest oil exporter, could more than double to 53 million within about 30 years from 25 million now, John Sfakianakis, chief economist at HSBC Holdings Plc Saudi affiliate SABB bank said on Wednesday.
"Saudi Arabia is caught between a rock and a hard place. The government know they have to feed the increasing population, but on the other hand they cannot increase domestic agricultural output because of the country's scarce water supplies," a Saudi rice importer said.
"So sooner or later they will be forced to grow rice and other crops on foreign lands. Many here don't like Thai rice, but if the world is facing food scarcity, then a taste change is the last thing we should worry about."
Inflation is taking the shine off the rapid economic growth experienced by Gulf oil exporters, flush with windfall oil revenues, as food prices soar.
Last month, the government cut import tariffs on food and building materials, after inflation almost doubled in the six months to February.
Since December, Saudi Arabia has introduced cost of living allowances for public sector employees, boosted subsidies on rice, baby milk and other products, and introduced welfare payments.
Reporting by Summer Said, editing by Daniel Magnowski
Gulf newsroom, +971 4 366 4296, summer.said@reuters.com
