Saudi businessmen plan to invest in rice production in foreign countries to secure a steady supply of the commodity to the Kingdom, the secretary general of the Asharqia Chamber in the Eastern Province said Wednesday. Adnan A. Al-Naeim, Secretary General of Asharqia Chamber, said the recent move by India to ban the export of rice to importing countries like Saudi Arabia “clearly indicates that we are under the mercy and dictates of rice producing countries.” Rice producing countries like India, Egypt, the Philippines, Cambodia, Thailand, Vietnam have either banned or slashed their export quotas or increased their prices, thereby jacking up series of price hikes in importing countries. “The Kingdom is not a rice producing country; we are always under the control of exporters who dictate the price. The best option we have is to become rice producers ourselves by investing in agriculture in countries that still have vast land for rice production,” said Al-Naeim. Experts expect further increase in the rice prices after the decision by rice-producing countries to ban its export. “Rice is considered the basic meal here. So we need quick solution to overcome this problem, especially when the prices have already gone up,” said Ihsan Ali Bu Hulaiga, an economic researcher. The export price of rice is projected to double during this next quarter of this year. The Thai fragrant rice called jasmine, for example, will double in price from the current $484 per ton to $968 per ton by next quarter, according to a press statement from the Thai Ministry of Commerce and Industry. The Kingdom's annual consumption of rice is over 700,000 tons, which is about 4 percent of the total global consumption and valued at SR.3 billion. Rice consumption is expected to hike drastically in the next few years as the number of foreign workers, whose staple food is rice, increases. Demand for rice also rises during the Haj season. Al-Naeim said businessmen and agricultural investors in the Eastern Province are now seriously looking at the possibility and feasibility of investing in rice production in countries in Asia. Echoing Al-Naeim's views, Dr. Habibullah Turkestani, marketing and business management professor in King Abdul Aziz University, said: “I advice the Ministry of Commerce to start investment projects in rice producing countries.” Saudi Arabia has already taken steps to cushion the impact in the rise in price of rice by subsidizing import. King Abdullah has decreed the cut in the cost of imported rice by 20% by compensating importers and dealers. The subsidy, according to Undersecretary of Commerce Hassan Ugail, will cover imports shipment before January 5, 2008. Rice importers will have to present import documents in order to avail of the 20% subsidy. The Kingdom has around 180 companies importing rice. The biggest are the Dammam-based Al-Muhaideb, Al-Babakar and Al-Shallan that account for nearly 80 percent of the Kingdom total imports. The rice subsidy has eased prices in the market, according to Sayed Salem, manager of Farm 9 Supermarket in Al-Khobar. “The 10 kg, which should be SR90, is only SR60 now because of the subsidy program of the King,” he said. However, the SR60 is still too high for most consumers, particularly for the expatriate workers. __
