UPDATE 1-Saudi Arabia considers adding soft wheat imports

Thu Jun 7, 2012 6:28pm IST

* GSFMO agency may import soft as well as hard wheat

* Sees wheat imports stable at 2 mln T, barley down at 6.5 mln T

* Kingdom wants to reduce massive barley use in animal feed

* Plans privatisation of GSFMO's flour mills (Adds quotes, flour mill privatisation, animal feed policy)

LONDON, June 7 (Reuters) - Saudi Arabia may import soft wheat, in addition to the hard wheat it currently imports, to meet local food demand, opening it up to a wider range of wheat exporters, the kingdom's Grain Silos & Flour Mills Organization (GSFMO) said on Thursday.

The country has increased imports sharply since abandoning plans for self-sufficiency in wheat in 2008 and now aims to be completely reliant on imports by 2016 in order to save water.

The kingdom is studying local consumer demand to assess potential needs for soft wheat, which is suited for products such as biscuits, Waleed el-Khereiji, director general of GSFMO, said on the sidelines of the International Grains Council's annual conference.

"Some of the industries in Saudi Arabia need soft wheat," he told reporters. "We are doing a study of the demand for soft wheat in Saudi Arabia, and according to that we will gradually import soft wheat."

"That will open up (imports) to other origins."

Saudi Arabia, which traditionally uses high-protein hard wheat for flour, expects to import about 2 million tonnes of wheat in 2012, in line with last year's level, he said.

Last year, the European Union was the biggest supplier of wheat to Saudi Arabia with a 36 percent share, most of which was from Germany, he said in an earlier presentation.

The next-biggest wheat exporters to the kingdom were Canada with a 26 percent share, the United States with 14 percent and Australia with 12 percent.

Saudi flour mills traditionally were built to process hard wheat, but new mills are able to handle either hard or soft wheat, el-Khereiji said.

The kingdom is also considering privatising the flour mill activities of GSFMO in an auction with four lots, he said, adding this could go ahead in the next two years.

In animal-feed grains, the country wants to reduce its dependency on barley, of which it is the world's largest importer, and plans to use feed wheat as well, he said.

Saudi Arabia's imports of barley used for feed were expected to fall to 6.5 million tonnes from 7.2 million in 2011, he said.

"The government started to import feed wheat, and that will help decrease the high imports of barley," he said, adding the issue was obtaining better nutrition for livestock and not a problem of barley availability on the world market. (Reporting by Gus Trompiz; Editing by Jane Baird)

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