Saudi Arabia Mulls Water Imports from Sudan

A recent study recommends Saudi Arabia to import water from Sudan.

It was “drafted ahead of the upcoming 6th Riyadh Economic Forum, [and] urged the Ministries of Agriculture, Water and Electricity to approach the Ministry of Foreign Affairs to work out international agreements for the import of water and to ensure rights.”

Plans to import water from Egypt, Iraq or the mountains of Turkey go back to the 1950s in Saudi Arabia (see Oil for Food p. 69). In the 1970s a Saudi prince even wanted to tow icebergs from Antarctica.

Such plans never materialized for various reasons. Some of them technical (icebergs melt when transported to lower latitudes……), some of them economic (costs for¬† water transportation are high), some of them strategic (Saudi Arabia was afraid that a water pipeline form Turkey might be vulnerable to disruptions, preferring desalination instead).

Sudan will have maxed out its allocation quota of the Nile water sharing agreement of 1959 when it will have finished its current dam program towards the mid of the decade (see Oil for Food, ch. 6). The agreement is openly questioned by Ethiopia and other sub-Saharan riparians who do not have any water allotment. Three quarters go to Egypt, one quarter to Sudan.

High leakage losses of 30-40% along the water pipeline that leads from the Gulf to Riyadh do not bode well for any pipeline from Sudan that would span even larger distances. Add Sudan’s lacking infrastructure, notorious corruption and political instability and you might call water transportation the crazy part of the paper. Much more reasonable parts call for a reduction of water subsidies and higher water tariffs.

At the end of the day Gulf food security is about food and hence virtual water trade rather than blue water trade. (See the recent Chatham House report for the food trade case). Ensuring trade routes and the ability to pay for food imports while downsizing domestic agriculture to be able to source blue water supplies locally would be the most realistic approach.

Impact of Global Food Price Rise on the UAE

The recent rise in global food prices, particularly animal feed like corn and soybeans, impacts on the UAE, which has the highest pass-through of international prices in the GCC according to a Word Bank paper.

The UAE’s system of food price controls will come under pressure because of this. Either the government starts to give subsidies to retailers as it has already done with partly government owned Agthia, or retailers will withdraw certain items from sales should they perceive necessary cross-subsidies as excessive. A black market would develop.

Saudi Farmers Complain about Wheat Phase Out and Reduction of Water Subsidies

Saudi Farmers in the Hail area in the North of the country complain about the wheat phase out and the reduction of water subsidies by the Ministry of Water and Electricity.

This makes the even ore water guzzling alternative of growing alfalfa, glover and other green fodder non-viable as well.

Many farmers also struggle with outstanding loans and demand compensation form the government.

Downward Sticky Food Prices and Saudi Price Monitoring

The King Abdullah Chair for Food Security at the King Saud University in Riyadh will monitor local food prices and compare them with global market developments.

The concerns tie into a World Bank study that found that despite extensive subsidy regimes there is considerable pass through of global food price increases in Saudi Arabia and elsewhere in the Gulf.

Yet if global food prices come down, local prices do not follow suit. They are downward sticky, which is often blamed on profiteering and collusion of traders.