Saudi Barley Imports: Russia and Ukraine Fail to Deliver

In good years, Russia and Ukraine are responsible for about half of global barley exports. Saudi Arabia in turn imports about 40 percent of globally traded barley. An early drive at barely self-sufficiency was given up in 2003 already, before the wheat phase out in 2008.

After a drought this summer Russia and Ukraine fail to provide necessary quantities and Saudi Arabia needs to source supplies in Australia, Argentina and Western Europe, where France is a large supplier.

One reason why barley imports in Saudi Arabia are so high are subsidies.They encourage a sheep fattening industry – economically it makes more sense to import lamb and feed it on subsidized barley than importing grown up sheep.

This industry is mostly located in Jeddah and other coastal cities, not in traditional livestock rearing areas.

Beside this industry barley subsidies are also important to feed the camel and sheep of Bedouin in rural areas and ensure tribal loyalty there.

Hence, interests are vested. Yet Saudi Arabia needs to think whether it is wise to incentivize barley consumption to such an extent and maintain such a high dependence on volatile imports.

As self-sufficiency is not an option for lack of water, some sort of demand reduction might be necessary.