The King Abdullah bin Abdul Aziz Chair of Food Security at King Saud University has taken up a study of global price fluctuations of eight basic food commodities to facilitate the monitoring of future prices.
Dr. Khaled bin Nahar Al-Ruwais, the chair’s supervisor, said the outcome of the study would enable the authorities to monitor global price fluctuations until 2020.
“The study results will be submitted in two months to the Riyadh Chamber of Commerce and Industry (RCCI), which is funding the project,” he said.
Besides helping authorities in tracking future global prices, the study would also provide inputs with which global production of these food items can be tracked besides identifying countries that are producing them, he said. Authorities can take decisions on these products in advance to the Kingdom’s strategic advantage.
Al-Ruwais pointed out that Saudi Arabia is dependent on food imports with the annual bill reaching SR70 billion.
“This situation demands that we establish a commission for strategic storage of food, and to follow up developments in global food production that will form the foundation for future decisions on imports,” he said.
The official blamed the Supreme Economic Council for the delay in establishing such a commission for strategic storage of food, which the Chair had recommended.
“The setting up of a commission as a huge national project is essential for food security in the Kingdom, and spare us the hassles of fluctuations in global food prices and agri-production,” he said.
In the same context, the Food and Agriculture Organization of the United Nations (FAO) had announced that global food prices dropped by two percent last June, as a result of fall in prices of grains, soya and palm oils.
Al-Ruwais said: “Past agreements that traders signed were based on market prices prevailing at that time. But with the improvement in agri-productions, it is assumed that prices drop four months from production time, and not immediately.”
He said the Ministry of Commerce should monitor prices in the coming few months to control them. He noted that the drop in agri-productions in 2007 to 2008, due to weak investments in the field and the rise in prices prompted investors to pump huge funds that recently started to bear fruit.
Blurb:
Study aims to develop global food price index
