Fahd Balghunaim

JEDDAH, 2 March 2008 — Agriculture Minister Dr. Fahd Balghunaim has said that the flour crisis that hit the Kingdom earlier this month was artificial and that the flour produced by state-owned mills was enough to meet the country’s requirements.

“Flour is heavily subsidized in the Kingdom and its price has remained the same for the last 30 years,” the minister said, adding that this has encouraged some people to smuggle flour to neighboring countries to make quick money.

He said the use of flour, as a major raw material by big food factories, such as those manufacturing candies and sweets, was another reason for the shortage of flour in the Kingdom. He added that many farmers used flour to feed their cattle when prices of cattle feed went up.

Balghunaim said the opening of new flourmills in Hail and Madinah would increase supply. “The situation is much better than before,” he added. However, he urged farmers not to use flour as a cattle feed as it would not only jeopardize supply but also harm their animals.

He refuted suggestions that the flour crisis was created by a delay in the opening of new mills. “The increased use of flour in place of rice, when the prices of rice went up, was another reason for the growing demand,” he told Al-Eqtisadiah daily.

He hoped that the corrective measures taken by the ministry, in coordination with the Ministry of Commerce and Industry and other government agencies, would contain the problem. He, however, stressed the need to increase production and prevent the illegal use of flour.

Balghunaim said four new flourmills that will open in Madinah, Hail, Al-Jouf and Riyadh would make available an additional 16 million bags of flour weighing 45 kg each annually, bringing the total supply to 70 million bags. “Total output of these mills would reach 48,000 bags daily and 16 million bags annually.”

He confirmed the ministry’s plan to cut short wheat production by 12.5 percent annually as part of a strategic move to preserve underground water in some parts of the Kingdom, adding that the General Organization for Grain Silos and Flourmills would have a strategic reserve of wheat for six months.

The minister also disclosed that the Kingdom would start importing wheat by the end of this fiscal year. He voiced fears that this year’s wheat output would be less than the requirements of flourmills across the country. “The ministry stopped sanctioning new wheat projects 23 years ago,” he pointed out.

Balghunaim spoke about cattle feed supply and that the government subsidizes barley by paying SR35 for each bag. “We subsidize 11 ingredients in cattle feed,” he said and urged farmers to use composite feeds. “Barley prices have gone up to SR60 per bag. In some places it is sold for less than SR40. We hope that the prices will come down further in coming months,” he added.

Two weeks ago a new cattle feed factory was opened in Wadi Al-Dawasser. Jizan will have another factory shortly, the minister said and urged producers to supply feed at reasonable prices.