The Middle East remains a region heavily dependent on the production of oil. But economic difficulties brought on by depressed oil prices in recent years has moved many governments to liberalize some sectors, including the wheat and milling industries. As a result, private investment is changing the face of the milling industry in the Middle East. Modern milling technologies and state-of-the-art equipment are replacing old stone mills in many areas, boosting capacities and improving efficiencies.
A capital expenditures survey — the first ever attempted by World Grain — shows that many Middle East millers have long-range capital improvement plans, a sign of confidence in long-term growth and expansion (see page 40). Capital spending budgets are expected to increase in the next five years, with a median of 10% of company revenues earmarked for new building, facility expansion or equipment upgrades.
The region remains a net importer of grains, particularly wheat. But flour imports are shrinking as local milling capacities improve, and many Middle Eastern countries are even exporting to Asia, Africa and the former Soviet Union. Observers say the pace of growth, however, will depend on the maintenance of relative peace in the region.
Petroleum production and processing account for about 60% of exports, 60% of government revenues and 30% of GDP. The country produces no wheat or other major crops. Its one mill utilizes wheat imports averaging about 60,000 tonnes per year.
Population: 67 million
Per capita consumption of wheat has been declining, to about 189 kg currently — a level still among the highest in the world. Total annual wheat consumption is about 12.4 million tonnes. The state-owned milling sector, consisting of about 126 mills with about 7 million tonnes annual capacity, is undergoing privatization.
Population: 65 million
Wheat consumption has enjoyed steady growth, from 11 million tonnes in 1990 to over 16 million tonnes today. Imports in 1999 totaled nearly 7 million tonnes, with the rest produced domestically. One government buyer procures supplies for an estimated 200 state-owned mills.
Population: 22 million
Domestic production of wheat is estimated at about 1.5 million tonnes, and imports total about 2 to 2.5 million tonnes per year. Iraq has purchased wheat under the U.N. oil-for-food program, but not recently. Information about Iraq's milling industry was unavailable.
Population: 5.7 million
The 1999 wheat crop, at 80,000 tonnes, was one of the lowest on record. Wheat imports have risen to over 1 million tonnes, with about 90% coming from the U.S. The private Israeli milling industry sources its own wheat and consists of about 20 mills, including three state-of-the-art mills in the Palestinian Authority.
Population: 4.6 million
Jordan's wheat, flour and bread industries are controlled by the government, but plans are to privatize the wheat and flour sectors. Wheat consumption, pegged at 760,000 tonnes annually, has dipped in recent years because of increases in bread prices and a change in government subsidies of bread.
Population: 2 million
Kuwait consumes about 250,000 tonnes of wheat annually, but it is believed that consumption increases will parallel an expected 3.8% growth in population. Kuwait Flour Mills and Bakeries is the country's solitary flour milling business and is the sole wheat buyer.
Population: 3.6 million
Annual per capita consumption of wheat is about 312 pounds. Only 5% of wheat use is produced domestically and wheat imports average close to 400,000 tonnes per year. The Lebanese milling industry is privately owned and millers are free to source and purchase 75% of their own wheat requirements.
Population: 2.4 million
This oil-rich country grows no wheat, but its annual wheat consumption, presently at about 225,000 tonnes, is expected to grow along with the population. One mill in Muscat and another in the southern region supply the country's wheat and flour needs.
Oil has given Qatar a per capita GDP comparable to leading West European industrial countries. With no domestic production, wheat imports account for total consumption of about 100,000 tonnes annually. The country's one mill is state-owned and wheat is procured by the government.
Population: 21.5 million
All aspects of the wheat sector — from procurement to milling to distribution — are controlled by the state although talks with the World Bank to privatize the milling industry (six mills, with a daily capacity of 5,600 tonnes) are ongoing. Self-sufficient in wheat, annual production totals 1.8 million tonnes.
Population: 17.2 million
Wheat production steadily increased in the 1990s to about 4 million tonnes annually. In 1999, Syria permitted the private sector to import soft wheat for milling and wheat flour for pasta, provided flour and pasta would be exported. Observers believe this may be a step toward liberalization.
Capital: Abu Dhabi
Population: 2.3 million
No wheat is grown locally and annual imports average about 1 million tonnes. Nearly 40% of food manufacturing plants in the Gulf region are in the U.A.E. Four of the country's five flour mills are privately owned and source their own wheat supplies.
Population: 16.9 million
Annual per capita wheat consumption is high, at 130 kgs. Yemen, which produces only 6% of its wheat needs, recently liberalized wheat and wheat flour imports, estimated at nearly 2 million tonnes annually. New mills at the ports of Aden and Salif are expected to increase the demand for wheat.