The move has turned Saudi Arabia's state-run Grain Silos and Flour Mills Organization (GSFMO) into one of the biggest new buyers in the international grains market. GSFMO has submitted a proposal to privatize the 11 flour mills to the Supreme Economic Council, for examination, its Chairman Fahd Balghunaim told Reuters in an interview at the organization's headquarters.

"We are eager to do this as soon as we can," he said, without setting an exact timeframe. The state, meanwhile, will continue to control wheat imports because it is a "strategic commodity," he said. Saudi Arabia's annual wheat needs are estimated at 3 million tons.

Saudi farmers are expected to harvest 1 million tons of wheat this year, up from 0.95 million tons in 2009, said Balghunaim, who is also the Kingdom's agriculture minister.

Wheat farmers have abandoned the crop at a faster rate than the annual purchasing decline the authorities targeted. Wheat-planted areas in 2010 are down by a cumulative 40 percent since 2008.

But Balghunaim said he did not expect local farmers to totally abandon cultivation of the crop. "We don't expect to reach zero harvest in wheat. The state has not banned wheat cultivation but decided to stop buying wheat from farmers. There are farmers who continue to plant wheat locally. There is probably a market for it, and there are others who wish to plant organic wheat," Balghunaim said.

Asked about key criteria in the GSFMO's choice of wheat purchases, Balghunaim emphasized a minimum protein content of 12 percent. "The wheat produced locally has a 14 percent protein content." GSFMO also operates fodder plants as well as the 11 flour mills in the Kingdom located at nine different sites.

Meanwhile, the organization's board of directors approved Tuesday the construction of a new flourmill in Makkah and expansion of the flourmills in Jeddah and Dammam. The new mill in Makkah will have a production capacity of 1,200 tons of wheat and will contribute to meeting the region's flour requirements.