E-Malt.com News article: Saudi Arabia: Ministry of Agriculture increases barley subsidies to maintain prices

The Ministry of Agriculture increased on Wednesday the barley subsidy from SR500 to SR700 per ton in a move to ease the animal-feed crisis experienced in various parts of the Kingdom, Arab News reported August 10. The ministry is hoping to maintain the price of barley at SR28 per bag sold at ports of entry and at SR32 per bag in other places to cover logistics costs, Saudi Press Agency reported.

“The subsidy was increased as per the orders of the higher authorities,” Agriculture Minister Fahd Balghunaim said in a statement to the Saudi Press Agency.

Balghunaim urged the cattle farmers not to depend on barley as a major source of cattle feed but look for other kinds of feed with higher nutrient values. The present arrangement would be reviewed after three months, the minister added. A ministerial committee recommended the hike in the subsidy for imported barley to counter the current rising trend in barley prices worldwide.

Worried herders were found frequenting the empty Aziziah Market for cattle feed in Riyadh on Wednesday before the news of the subsidy hike was flashed, Al-Eqtisadiah business daily reported yesterday. Similar situations were reported from Al-Jouf, Hafr Al-Baten, Yanbu, Jeddah and several other places.

Muhammad Al-Sowailhy, a cattle trader in Riyadh, said only one barley truck came to the market on Tuesday. The shipment was sold out in a few minutes to the scrambling herders at the rate of SR37 per 50-kg bag, up from SR27 a week ago. He said that an average of 20 trucks each carrying 500 bags of barley used to come to the market every day. The number of incoming trucks began to fall markedly four days ago.

The trader said he believes importers are manipulating the market by sitting on their feed supplies until the subsidy was announced, which would be illegal.

“A rumor is going around that several Saudi-bound cargo ships carrying barley are anchored in the Suez awaiting the government move to increase the subsidy. Then only they would approach the Saudi ports in the Eastern Province and Jeddah,” he said. An importer in Jeddah, Ahmad Sanie, attributed the present scarcity to the unprecedented dry weather experienced in the major manufacturing countries of barley. Such countries stopped their exports to fulfill the needs of their domestic markets, Sanie said.

As the price of barley stood at $340 (SR1,275) for a ton in the international market, a bag of 50 kg of imported fodder could be sold at a minimum of SR31 in the Saudi markets, he said.

According to a report from Yanbu, a livestock owner, Abdullah Al-Sinani, has stopped purchasing barley in protest at the rise in prices, which reached SR29 per bag. He accused “greedy businessmen” to be behind the increase. On Monday police broke up a dispute between a livestock owner and a seller who insisted on only selling five bags of hay at SR25 per customer in the Yanbu market. On the other hand, the herder wanted more bags. Police were forced to stop trade at the location and move buying and selling to the Chamber of Commerce and Industry.


10 August, 2007