At IAOM MEA 2025 in Jeddah, a high-profile panel of millers and grain traders explored how Saudi Arabia’s new grain architecture is quietly positioning the Kingdom as a potential grain and food security hub for the Red Sea and Gulf region.

Moderated by Dan Basse, President & Founder of AgResource (USA), the session brought together Eng. Abdullah Ababtain, CEO of First Mills (Saudi Arabia); Mauro Barbieri of COO & Interim CCO at SABIL Company, (Saudi Arabia); Pieter Defoor, Founder & CEO of Commo18 (Belgium) and Ahmed ElSebaie, General Manager of Egyptian Swiss Group.

SAUDI ARABIA’S GRAIN TRANSFORMATION ENTERS ITS SECOND PHASE

Saudi Arabia’s wheat story has flipped in just over a decade. From a policy of water-intensive domestic production in the 1970s–2000s, the Kingdom has shifted to near-total reliance on imports, while keeping six to eight months of strategic stocks in place.

Dan Basse reminded delegates that Saudi Arabia once produced up to 2.5 million tonnes of wheat per year using desalinated water and fossil aquifers. That model was phased out from 2016 onwards as costs and environmental pressures mounted. The country is now in the midst of a second transformation: the privatisation and restructuring of grain logistics and milling, and the gradual transfer of wheat sourcing and trading functions from the state to specialised companies.

At the centre of this shift is SABIL Company, represented on the panel by COO and Interim CCO Mauro Barbieri. SABIL has inherited much of the old SAGO infrastructure and now operates 14 grain facilities across the Kingdom, including four port terminals and ten inland branches, with a fifth terminal under construction at Duba to serve NEOM and northern Saudi Arabia.

Since 1 February 2024, SABIL has been responsible for receiving and handling imported wheat and delivering it to the Kingdom’s 13 flour milling companies. From the second half of 2026, SABIL is expected to take on an even bigger role: sourcing and trading wheat on behalf of the Kingdom, in coordination with the General Food Security Authority (GFSA). “We are moving from being purely an operator to becoming a major player in wheat sourcing and risk management for Saudi Arabia,” Barbieri said, highlighting investments in risk management, digitalisation and predictive maintenance.

With about 2.7 million tonnes of storage capacity, SABIL is well-positioned to manage quality differences by origin and support complex blending strategies for Saudi millers.

SABIL is also opening its infrastructure to third-party business. The company has:

• Re-introduced flat storage in Hail and Hasa, where it is already in discussions with potential customers to use the space for wheat and other grains and feed commodities.
• Partnered with MAWANI, the Saudi Ports Authority, and with private terminal operators to discharge vessels at SABIL’s facilities and increase flexibility at Red Sea and Gulf ports.
• Cooperated with Saudi Railway to connect ports to inland silos
• Announced an MoU with its parent company SALIC, while working closely with sister company OLA to coordinate trading and inland logistics.

“We have a unique infrastructure along the Red Sea and Gulf coasts that can support the entire regional ecosystem when markets are disrupted,” Barbieri stressed.

SAUDI MILLS HAVE STARTED FLOUR EXPORTS

On the downstream side, Eng. Abdullah Ababtain, CEO of First Mills, described how Saudi millers are adapting to this new environment. He emphasised that the transition from government to private milling companies has been smooth, with First Mills’ roughly 7,000 tonnes/day capacity running without disruption through the handover period. 

Domestic flour demand is expected to grow steadily, driven by:

• Population growth and urbanisation
• Rising tourism, especially religious tourism during Ramadan and Hajj
• A more diversified food and bakery sector

Saudi Arabia has also started to export flour, a topic that drew particular interest from the audience. In response to a question from Miller Magazine editor Namık Kemal Parlak, Ababtain confirmed that Saudi mills are already shipping flour to several countries, including Iraq, Syria and Jordan. “We reimburse the subsidy to the government and export at free-market prices,” he explained. “But domestic demand has priority, particularly during Ramadan and Hajj, when our mills run 24/7. Exports must always be balanced against our responsibility to serve the local market.” 

Saudi Arabia’s 3.5 million tonnes of wheat storage capacity also opens the door to a regional food security role. The Kingdom’s climate, infrastructure and silo network allow wheat to be stored for long periods, making it a potential hub for the Red Sea and Arabian Gulf region in times of supply disruption.

EGYPT’S CHANGING IMPORT MIX AND REGIONAL IMPLICATIONS

If Saudi Arabia’s story is about institutional reform and storage, Egypt’s is about shifting origins and market structure. Ahmed ElSebaie, General Manager of Egyptian Swiss Group, described how Russia’s dominance in Egyptian wheat imports has eased:

• Russian wheat’s share has fallen from around 74% to about 55%.
• Ukranian wheat has gained sharply, from around 13% to roughly 30–31%.

At the same time, the public sector’s share in milling and distribution has declined, while the private sector has increased its role by about two percentage points compared with last year. Private millers are also becoming more active in flour exports, adding an extra layer of demand and competition.

A key institutional change is the emergence of Future of Egypt (Mostakbal Misr), a unified state trading company that has effectively replaced GASC as the single public buyer of wheat for the subsidy system. 

ElSebaie also pointed out that local Egyptian wheat production is increasing, and that high opening stocks in Egypt and Black Sea exporting countries have reduced the immediate buying pressure this year. Egyptian wheat imports are widely perceived as 15–20% below last year’s pace so far. 

LESS TRANSPARENCY, MORE RISK

From a trader and broker perspective, Pieter Defoor, Founder & CEO of Commo18 in Belgium, took a closer look at the pricing environment. He argued that the disappearance of large, highly visible tenders – from SAGO in Saudi Arabia or GASC in Egypt – makes price discovery more difficult:

• Historically, these tenders gave the market a clear benchmark for where big volumes were trading.
• Moving to less transparent, negotiated buying means more reliance on bilateral conversations and “opinions” rather than hard reference prices.

On the origin mix, Defoor described the current market as “a very interesting moment”:

• Argentina has a larger crop, but with somewhat lower quality, and low-protein wheat (around 10.5%) is priced very aggressively.
• Russian 12.5% wheat remains competitive but may show less elasticity in some lots.
• Australian and certain Canadian wheats offer strong protein and gluten at historically good prices.

For millers in the Middle East and North Africa, this opens up blending opportunities. Defoor noted that by combining the specific characteristics of Russian wheat with the strength of Australian or Canadian wheat, millers can design grists that deliver the required functionality at an attractive overall cost.

However, he sees a psychological challenge: buyers are extremely focused on not losing the last 5 dollars per tonne, but less attentive to the 30–40 dollar per tonne upside risk if prices spike due to a weather or geopolitical shock.

On risk management, both Defoor and ElSebaie agreed that standard futures markets (CBOT and Matif) offer only limited hedging value for pure Black Sea exposure in the current environment:

• Relationship between Russian FOB and Matif has weakened.
• Political risk, sanctions and logistics constraints distort basis relationships.
• Zooming out over two years, prices have drifted lower; but at the timescales traders actually work on, short-term correlations are weak.

THE NEW GEOPOLITICAL MAP

The panel also addressed the geopolitical dimension. Basse noted that in a recent UN meeting the Middle East was described as one of the more stable regions in the world, even as other exporting regions face rising political and climate uncertainty.

For Barbieri, Saudi Arabia’s Vision 2030 has been a key driver of:

• Large-scale investment in infrastructure, ports and rail
• Upgrading the legacy SAGO network
• Building redundancy and flexibility into the system

ElSebaie underlined that segregation is critical. He noted that even two shipments of the same declared grade can show different protein levels. In his view, storage capacity is not only about food security; it also allows millers to segregate grain, manage quality and capture protein spreads more effectively.

Ababtain added that Saudi Arabia’s large storage capacity is not only for domestic security, but can also support food security for neighbouring markets via both the Red Sea and the Arabian Gulf.