"We take the view that the global food market is facing some unforeseen demand dynamics, which are exacerbated by unusually low food stocks and by the demand for biofuels in developed markets. In such a tight market, we believe that speculators thrive and push prices to new highs within the food commodity asset class. The less optimistic outlook does make Saudi Arabia more vulnerable, as one of the biggest rice importers in the world, in both absolute and per capita terms. After Iran and Iraq, the Kingdom is the third largest rice importer in the Middle East – and is the world’s biggest importer of Basmati rice.
"During the next decade, the Kingdom will move from being a net wheat producer to a wheat importer. Already Egypt, the biggest importer of wheat in the Middle East, imports about three times more wheat than is consumed annually in Saudi Arabia. But still, in a global market where wheat stocks have been in freefall since 1997, the Kingdom may face a demand predicament as a major wheat importer in years to come," said Sfakianakis."