Business | Markets
Riyadh asks traders to raise rice stocks
The Saudi government has proposed that rice importers consider raising their stocks of the grain by 50 per cent, two importers said yesterday, but it was not immediately clear if the industry will heed the call.
- Reuters
- Published: 23:47 July 29, 2008
Riyadh: The Saudi government has proposed that rice importers consider raising their stocks of the grain by 50 per cent, two importers said yesterday, but it was not immediately clear if the industry will heed the call.
Inflation in Saudi Arabia, a mostly desert country which imports the bulk of its food needs, is just off a three-decade peak.
Saudi Arabia imported 958,000 tonnes of rice in 2007, making it the world's sixth-largest buyer, according to the US Department of Agriculture.
"This is just an idea that the commerce and industry ministry floated at a recent meeting with rice importers," the managing-director of a leading rice import and trading firm told Reuters on condition of anonymity.
"They said that this could be done in two years or even five years, they left it open for us ... We don't know if it will be worth our while to go ahead with this proposal."
"There is competition. Why should I spend money on this if my competitors don't?"
A senior manager from another food trading company, that also imports rice, confirmed the information.
"It implies raising to between six and eight months the period that strategic stocks can cover from about four-five months currently. They [government] think it can stabilise the market," he said.
Saleh Al Khalil, head of the food supply department at the commerce and industry ministry, declined immediate comment.
The government said in May it would swiftly provide land for stockpiling basic staples and would increase global investments to ensure its long-term food security.
The surge in inflation is stirring popular discontent at a time when the world's top oil exporter is basking in windfall revenue from high oil prices.
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