JEDDAH/RIYADH: Saudi Arabian leaders in government and industry are set Sunday (today) to discuss plans to increase strategic food reserves to fend off a spike in global prices and secure food supplies. The Kingdom said this week it would boost wheat reserves to cover its needs for a year instead of six months following a call by the Shoura Council. Executives and officials at the chamber of commerce said Saudi Arabia needed to build reserves in foods such as wheat and eight other commodities as a buffer against rising global prices. Top government officials will address the issue at a conference hosted by the food security committee of the Riyadh Chamber of Commerce and Industry. The head of the grains authority as well as trade and agricultural ministers will attend, according to the invitation. The United Nations' Food and Agricultural Organization (FAO) said earlier this month that food prices had hit a record high last month above 2008 levels. Saudi's annual inflation eased in December to 5.4 percent - well below the record of 11.1 percent in July 2008 - but rising global prices will keep inflation above average historic levels, economists said. "Food inflation in Saudi could remain in the high single digits," said Banque Saudi Fransi chief economist John Sfakianakis. The Kingdom has become a major buyer of wheat and other commodities to cover food needs as the population grows. Saudi Arabia's current wheat reserves stand at 1.4 million tons plus a supply of 700,000 tons by April, the grains authority said this week. "Food reserves could provide some short-term solutions, but long-term ones will be provided when there is progress with farmland investment plans abroad," said Sfakianakis. Apart from building up reserves, Saudi Arabia has been trying to secure farmland in Africa. It ended its wheat cultivation program three years ago due to dwindling water resources. The government has urged companies to invest in farm projects abroad. GCC economies may be better placed to ride out the current spike in global food prices than in previous food crises, David Hallam, an analyst at FAO, said, noting that the current situation did not compare to the food crisis in 2007-2008. "It's a question of paying more for available supplies and in general, the Gulf countries are relatively well placed to cover those higher costs. Other countries, outside the GCC, are less well positioned to cover higher import bills, but we're not in exactly the same situation as we were in 2007-2008," he said. In December, the UN announced that food price levels were at their highest point since 2008. But while commodities such as sugar, meat and oil based products have increased in price, staple foods such as cereals and rice have been less affected, which has helped lessen the impact of the jump.
