Doing Business In Saudi Arabia - Bna

Agricultural Sector
Saudi Arabia is the largest agricultural, fish and forestry products importer among
members of the Gulf Cooperation Council (GCC) countries. The potential for agricultural
production is limited in Saudi Arabia due to the lack of arable land (less than 2 percent)
and water. Hence, imports of food will continue to be strong and will grow proportionally
with the population.
In 2007, Saudi Arabia’s total agricultural, fish and forest product imports were valued at
approximately $7 billion. High-value products accounted for 50 percent of total imports,
while intermediate agricultural products were estimated at more than $1 billion. U.S.
exports to Saudi Arabia in 2007 increased 63 percent over a year earlier to about $727
million, with consumer-oriented food products reaching a record $171 million in 2007, an
increase of 11 percent from 2006.
The vast majority of food products are subject to a 5 percent import duty. Selected
processed food products, however, are assessed higher import duties. In order to
protect local food processors and production from competitively priced imports, the
Kingdom ties import duties to the level of local production of similar products. As a
general rule, a maximum import tariff rate of 40 percent is applied when local production
of a food or agricultural product exceeds a self-sufficiency level. Currently, a 40 percent
import duty rate applies to fresh, dried and processed dates. Imported poultry meat,
table eggs and ice cream are assessed a 20 percent import duty while peanut butter and
mayonnaise are subject to a 12 percent duty. Imports of rice, baby milk and animal feed
(soybean meal, feed corn, barley, rice, sorghum, palm kernel meal, wheat bran, alfalfa
hay, sugarcane molasses, rice bran, and sunflower meal) are subsidized while coffee,
tea and fresh red meat enter the country duty free. Saudi government pays a rebate of
$266.67 per metric ton of rice import. Earlier this year, the government increased the
number of animal feed grain included under it subsidy program from three to ten, by
including energy and protein rich animal feed. Under the revised program, the
government provides rebates which range between $58.13 on a metric ton of imported
sunflower meal to $320 per metric ton of barley. The subsidy depends on the type of
imported feed and is paid directly to the local importer.
Leading U.S. agricultural exports include rice, yellow corn, soybean meal, planting
seeds, crude and semi-refined corn oil, hardwood lumber, sweeteners, tree nuts (mainly
almonds), snack foods, fresh apples and pears, processed fruit and vegetables, dairy
products, red meat, fruit and vegetable juices, and a wide array of other high-value
consumer-oriented products.
5/13/2008