The Saudi government is looking to encourage investment abroad in items such as cereals, meat and vegetables, said the government official, who has direct knowledge of the policy but does not want to identified because he is not authorised to speak to the media. He could not immediately give more details.
"It makes a lot of sense for such public-private partnerships to take place since Saudi Arabia needs to ensure its food security amid the gradual divestment in the local agriculture," said John Sfakianakis, chief economist at HSBC Holdings Plc Saudi affiliate SABB bank.
The population of the desert kingdom, the world’s largest oil exporter, could more than double to 53 million within about 30 years from 25 million now, according to Sfakianakis.
Saudi Arabia’s cabinet on Monday approved plans to coordinate state and private sector activities, and to increase Saudi investments overseas in fisheries, livestock and food production, state-owned Saudi Press Agency reported on Monday, without identifying any countries.
Saudi Arabia plans to boost imports of wheat and gradually stop purchases of the grain from local farmers to conserve water, abandoning a 30-year programme to grow wheat that achieved self-sufficiency but depleted the country’s scarce water supplies.
Last month, the government cut import tariffs on food and building materials, after inflation almost doubled in the six months to February.
Saudi Arabia officials, including the central bank governor, have said the country is committed to its currency peg to the dollar, though the US currency’s decline through record lows against the euro is driving up import costs.
Since December, Saudi Arabia has introduced cost of living allowances for public sector employees, boosted subsidies on rice, baby milk and other products and introduced welfare payments.
