The Saudi Arabia Agribusiness Report features Business Monitor International's market assessment and independent 5-year forecasts covering the supply and demand outlook for the livestock, dairy, grains, rice, sugar, edible oils, coffee and cocoa sectors.

Business Monitor International's Agribusiness service also provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context, such as the background macroeconomic outlook and the downstream supply chain.

Key Benefits

• Use BMI's independent 5-Year industry forecasts to test other views - a key input for successful planning in dynamic agribusiness markets.

• Apply BMI's medium term commodity price forecasts to assist with budgetary planning and the identification of investment opportunities and potential risks

• Exploit latest competitive intelligence on your competitors and peers in Asia, Europe, Latin America, the Middle East and Africa through our company rankings and analysis.

Executive Summary

Saudi Arabia has a negative food and drink trade balance due to its sizeable population and harsh, hot weather, which is largely unsuitable for agriculture. Only around 1% of land is suitable for farming, with irrigated lands near oases virtually the only sites of cultivation.

However, despite these natural obstacles, the government has made the agriculture sector a development priority and has invested a great deal in local production through a variety of subsidy schemes. It has done so, not only as a means of diversifying the economy away from its strong reliance on the oil and gas sector, but also in order to reduce import dependency and as a means of supporting rural employment.

One of the most high-profile examples of such government schemes involves the government's investment in local wheat production. Starting in the late 1970s, the government invested heavily in a local wheat program with petrodollars accrued from the first oil boom in a scheme that has cost the government an estimated SAR60-70bn (US$16-18.7bn) over the years. The government eventually decided to pull the plug on this project not due to the financial cost, but its use of scarce water resources.

At the height of the project, it was using around 40% of all agricultural water, a sector that itself uses up around 85% of all of the country's water consumption. While the wheat project has not been a success, others have had more positive results. Several decades ago any large-scale dairy production was virtually non-existent, but now the country is a major dairy producer. The production of dairy products in Saudi Arabia has increased steadily in recent years, as farmers have been encouraged by government incentives and high market prices for their products.

Improved production practices have been matched by improvements in the standard of cattle imported, and this has helped transform Saudi Arabia from a dairy importer to a fast-growing dairy exporter.

Demand for dairy products is expected to remain strong in Saudi Arabia, even in the face of high food price inflation. For years the country's intense heat remained a major obstacle to the expansion of the dairy industry. But with growing urbanisation and the increased prevalence of white goods in homes, the industry has taken off. According to BMI estimates, demand for liquid milk is expected to climb by 13.2% to 2012, while demand for powdered milk, which is a more low-cost and durable commodity, is forecast to rise by 36% to 2012, following a very sharp rise of 83.4%. All of this demand will be met through imports as the country does not have a domestic powdered milk industry, with the trade balance for powdered milk growing increasingly negative.

Looking forward, the main risk for the industry comes from external factors. The dairy industry has benefited tremendously from the government's support. However, as government subsidies are reduced in line with WTO standards, the local industry will lose this protection. Given that the industry is fairly inefficient by global standards, this will drive many smaller producers out of the market.

Executive Summary

SWOT Analysis

Saudi Arabia Agricultural SWOT

Sub-sector Supply & Demand Analysis

Saudi Arabia Barley and Rice Outlook

Table: Saudi Arabia Rice Production, Consumption & Trade Forecast Data

Table: Saudi Arabia Barley Production, Consumption & Trade Forecast Data

Table: Saudi Arabia Rice Production, Consumption & Trade Historical Data

Table: Saudi Arabia Barley Production, Consumption & Trade Historical Data

Risks To Outlook

Saudi Arabia Dairy Outlook

Table: Saudi Arabia Milk Production, Consumption & Trade Forecast Data

Table: Saudi Arabia Butter Production, Consumption & Trade Forecast Data

Table: Saudi Arabia Cheese Production, Consumption & Trade Forecast Data

Table: Saudi Arabia Whole Milk Powder Production, Consumption & Trade Forecast Data

Table: Saudi Arabia Milk Production, Consumption & Trade Historical Data

Table: Saudi Arabia Butter Production, Consumption & Trade Historical Data

Table: Saudi Arabia Cheese Production, Consumption & Trade Historical Data

Table: Saudi Arabia Whole Milk Powder Production, Consumption & Trade Historical Data

Risks To Outlook

Saudi Arabia Livestock Outlook

Table: Saudi Arabia Poultry Production, Consumption & Trade Forecast Data

Table: Saudi Arabia Poultry Production, Consumption & Trade Historical Data

Risks To Outlook

Commodity Price Forecasts

Corn

Sugar

Milk

Rice

Competitive Landscape

Table: Agricultural Commodity Producers & Traders

Table: Agribusiness Suppliers

Table: Integrated Agricultural Producers

Downstream Supply Chain Context

Food

Industry Forecast Scenario

Food Consumption

Table: Saudi Arabia Food Consumption Indicators

Trade

Table: Saudi Arabia Food, Drink & Tobacco Trade Balance (US$mn)

Confectionery

Table: Saudi Arabia Food Sub-sector Indicators

Mass Grocery Retail

Industry Forecast Scenario

Table: Saudi Arabia Mass Grocery Retail Sales By Format (US$bn) -- Historical Data & Forecasts

Table: Grocery Retail Sales By Format -- Historical Data And Forecasts

Macroeconomic Context

Table: Saudi Arabia – Economic Activity

BMI Forecast Modelling

How We Generate Our Industry Forecasts