Saudi Arabia bought 780,000 tonnes of hard wheat in an international tender which closed on Friday, the country's main state wheat buying agency, the Grain Silos and Flour Mills Organisation (GSFMO), said on Monday.

The wheat, with 12.5 percent protein content, is for shipment during June to August, GSFMO acting director general Abdulrahman Al Ruwaitie said in a statement.

The accepted origins are the European Union, North America, South America and Australia, at the sellers' option, the GSFMO said.

The purchase comprises 13 consignments, with a total of 540,000 tonnes in nine vessels to be shipped to the port of Jeddah and 240,000 tonnes in four vessels to Dammam, he said.

These purchases in dollars a tonne with shipment period in 2015 in brackets: Jeddah: - 60,000 tonnes bought from Noble at $230.94 C&F (June 1-10) - 60,000 tonnes bought from Glencore at $236.90 C&F (June 10-20) - 60,000 tonnes bought from Glencore at $236.90 C&F (June 20-30) - 60,000 tonnes bought from Concordia at $237.72 C&F (July 1-10) - 60,000 tonnes bought from Glencore at $237.90 C&F (July 10-20) - 60,000 tonnes bought from Concordia at $238.22 C&F (July 20-30) - 60,000 tonnes bought from Noble at $232.44 C&F (Aug. 1-10) - 60,000 tonnes bought from Noble at $233.42 C&F (Aug. 10-20) - 60,000 tonnes bought from Noble at $235.42 C&F (Aug. 20-30) Dammam: - 60,000 tonnes bought from Noble at $238.27 C&F (June 10-20) - 60,000 tonnes bought from Noble at $239.77 C&F (July 1-10) - 60,000 tonnes bought from Glencore at $239.90 C&F (July 20-30) - 60,000 tonnes bought from Glencore at $239.90 C&F (Aug. 10-20).

In its last reported purchase on Feb. 2, the GSFMO bought 690,000 tonnes of hard wheat. Saudi Arabia has become a major importer of hard and soft wheat since abandoning plans for self-sufficiency in wheat in 2008 as farming in the desert drained precious water supplies. The country plans a steady reduction in agriculture and aims to be completely reliant on imports to save water.

Saudi Arabian wheat imports are to reach a record high, as local production hits its lowest since at least the 1950s - with corn imports to soar too, as the government seeks to discourage livestock farmers from feeding barley.

Saudi Arabian wheat imports for 2015-16 will rise 8% to an all-time high of 3.8m tonnes, the US Department of Agriculture bureau in Riyadh said.

The increase in import demand is being driven by a sharp predicted fall in wheat production, which Saudi Arabia is phasing out, through subsidy reforms, in an effort to reduce pressure on the country's scare water supplies.

Domestic wheat production this year is forecast at only 30,000 tonnes, down from 425,000 tonnes in 2014-15, and 660,000 tonnes in 2013-14.

'Shortages of wheat four'

The bureau said that the "significant increase" in imports was needed to "make up for discontinued domestic wheat production and to maintain strategic reserves close to the domestic consumption level".

The government is keen to avoid periodic flour shortages, which it has said have been artificially created by dealers.

"There have been several press reports in the past two years about shortages of wheat four supplies in some parts of the kingdom, particularly in the of cities Jeddah and Makkah," the bureau said.

Major wheat exporter to Saudi Arabia include Germany, whose shipments soared more than 10-fold in 2013-14 to 1.35m tonnes, with Poland in second place with 524,249 tonnes, and Lithuania the third biggest origin, on 450,492 tonnes.

Water saving

Saudi Arabia is in the process of rolling back its wheat production.

Since 2008 the government has been aiming to phase out wheat production, reversing earlier support for the industry.

Support for domestic wheat production, which had been in place since the 1980s, was withdrawn over concerns that the industry, which is entirely dependent on irrigation, was depleting Saudi Arabia's water resources. 

Wheat imports have leapt over the same period. Between 2013-14 and 2014-15, imports rose around 80% to 3.38m tonnes.

Shift to fruit

Wheat importing in Saudi Arabia is under the control of a single government organisation, the Grain Silos and Flour Mills Organisation (GSFMO), which supplies bakers with subsidised flour, and it to be privatised.

Wheat producers are being encouraged by the government to switch to growing higher value crops, such as fruit and vegetables, in greenhouses.

But many farmers have switched from wheat production to forage crops, such as alfalfa, which consume more water than wheat.

The total area planted with forage crops has risen from 151,000 hectares to nearly 200,000 hectares between 2007 and 2014. The Saudi government is considering measures to discourage domestic green forage production.

Corn imports surge, as barley volumes retreat

Meanwhile, barley imports by Saudi Arabia – the top buyer of the grain – are forecast to fall as the government discourages the use of barley in animal feed.

Imports for 2015-16 are forecast at 6.8m tonnes, down 30% year on year.

Saudi Arabian livestock famers use barley as their default feed grain, but the unbalanced diet results in large wastage and slow weight gains.

The government is seeking to encourage imports of alternative grains, to boost the performance of the domestic livestock industry.

Decreased use of barley feed will prompt a large rise in imports of corn, which the bureau termed a "very important feed grain in poultry farms", accounting for 60% of feed formulations.

Corn imports are expected to grow by 29% to 4.5m tonnes in 2015-16, promoting Saudi Arabia above the likes of Colombia, Malaysia and Taiwan in the league of world corn importers.

At 4.5m tonnes, imports would have near-doubled in two years.

Saudi Arabia’s state grains authority GSFMO has issued an international tender to purchase 660,000 tonnes of wheat, European traders said on Thursday.

The recent fall in corn and wheat prices to around three-and-half-year lows has encouraged major importers to buy supplies on a large scale this week.

On Wednesday, Algeria bought about 500,000 tonnes of wheat while Iraq bought 350,000 tonnes of hard wheat.

Ethiopia also tendered for 70,000 tonnes of wheat on Thursday, when Japan also bought 99,052 tonnes and Taiwan bought 73,400 tonnes of U.S. wheat.

The tender deadline is Friday, Jan. 24, and offers must remain valid up to Monday, Jan. 27, traders said.

The Saudi tender sought 550,000 tonnes of hard wheat with a minimum 12.5 per cent protein and 110,000 tonnes soft wheat with 11 per cent protein, traders said.

Some 330,000 tonnes of the two types was sought for shipment to the port of Jeddah and 330,000 tonnes to the port of Dammam.

Shipments of 55,000 tonnes were sought for each port in stages from Apr. 1 to June 30.

In its last reported tender on Nov. 4, Saudi Arabia bought 720,000 tonnes of hard wheat.

Saudi Arabia has become a major importer of both hard and soft wheat since abandoning plans for self-sufficiency in wheat in 2008 as farming in the desert absorbed huge volumes of precious water supplies.

It aims to steadily reduce agriculture and plans to be completely reliant on imports by 2016 to save water.