Artificial flour crisis looming

Flour suppliers in Jeddah are warning against a fabricated crisis of the basic commodity by some contractors of the Grain Silos and Flour Mills Organization.
The contractors secretly channel their surplus to new bakeries not endorsed by the organization. The issue prompted the Jeddah Chamber of Commerce and Industry (JCCI) to hold an extended meeting at its headquarters Wednesday evening, a local newspaper reported.
Suppliers demanded the competent party to intervene and impose deterrent penalties to prevent the emergence of a black market for flour, given that the organization provides 2,500 tons of flour daily, which is enough to cover Jeddah markets.
The Grain Silos and Flour Mills Organization has nine centers across the country with a production capacity of 834 sacks of flour weekly to cover the needs of all 6,500 bakeries.
The Kingdom’s flour reserves amount to 2.52 million tons, and new projects are currently being implemented for extra storage capacity of 710,000 tons to cover the needs of the Kingdom for one whole year.
“The problem is that some distributors sell their surplus to a number of new bakeries that do not own a share in the organization for higher prices than those defined for the four types of flour,” said Omar Al-Hasan, a contractor with the organization.
“The Grain Silos and Flour Mills Organization provides the needs of contractors. There is no actual crisis, but what some distributors do are actions that violate the terms and conditions of distribution,” he said, pointing out that there are 28 contractors to meet the needs of all bakeries.
During a meeting held at the chamber, attended by JCCI Assistant Secretary-General Mohieddin bin Yahya Hakami and other prominent figures of the flour organization as well as the Ministry of Commerce, the committee of bakeries discussed the combined efforts to overcome obstacles facing this vital sector, referring to the low percentage of Saudization there and condemning the black market that emerged to sell and distribute flour.
The meeting highlighted the rational justification of forming a committee for this, noting that such a committee was tasked with securing the commodity, meeting the needs of the market, improving the quality of bread, drawing up a unified procurement policy of the raw material and developing a strategy for competition with the aim of keeping prices steady.
“The most important role of the committee of bakeries at the JCCI is organizing bakeries, including the production of each one, monitoring and supervising flour types and quantities, and imposing fines on distributors violating terms and agreements,” said Hattan Hammad, a bakery owner.