Last Updated :
26 August 2008 at 20:20 IST
Fearing food woes, Saudi on prowl for agri land
Commodity Online NEW DELHI: Rising food prices have forced Saudi Arabia to grab agricultural land in foreign shores and the country is on a hunt to purchase huge tracts of farm land in nations like Pakistan, Sudan and Thailand.
According to reports, Saudi Arabia plans to set up a new investment fund to buy agricultural land overseas to meet rising food demand in the Middle East’s largest economy.
Reports said Saudi government and agricultural firms will invest in the new company.
Oil-rich Persian Gulf Arab states, that pump a fifth of the world’s oil, like Saudi and the United Arab Emirates are rushing to buy land overseas amid rising concerns over food security after a global jump in the price of agricultural commodities.
The cost of grains, including corn and wheat, may double as economic growth in emerging economies with large populations such as Brazil and Russia push up meat consumption and demand for livestock feed.
Wheat and rice supply for the domestic Saudi market will be the new fund’s initial priorities.
Rapid population growth across the Gulf is also forcing the region’s planners to divert more energy, previously allocated for agricultural production, to feed their booming industrial and domestic economies.
The Dubai-based think-tank Gulf Research Centre estimates that its takes 1,212 cubic metres of ground water to produce a metric tonne of barley in Saudi Arabia. The arid kingdom depends on power-hungry desalination plants for its usable water.
There’s the problem of high food prices and water scarcity. Saudi’s estimated population of about 28 million people is growing at annual rate of about 2%.
The kingdom is the most populous country in the Arabian peninsula. Rising prices in Saudi Arabia are causing disquiet as the country struggles with double-digit inflation that’s partly undermining the benefits of record-high oil earnings.
Inflation in the kingdom, the world’s largest oil exporter, rose to 10.6% in June, a 30-year high, driven mostly by rising food prices. Pakistan, Sudan and Thailand are amongst the country’s being targeted for agricultural land grabs by Gulf planners.
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