The Omani government has begun subsiding wheat imports to offset the steep rise in international wheat prices following the outbreak of hostilities between Ukraine and Russia in February this year.
Majority state-owned Oman Flour Mills (OFM), one of the biggest importers of wheat in the country, said in a filing to the Capital Market Authority (CMA) on Wednesday that it has begun receiving a subsidy on its wheat imports from the government.
“We would like to disclose that Oman Flour Mills Company (SAOG) has received a letter from the government for the subsidy of wheat effective from May 1, 2022. As global wheat prices have seen a sharp increase, the government is keen to stabilise the prices of flour in the local market'', the publicly traded company stated.
It is the latest in a series of measures adopted by the Omani government to ensure that the high international cost of wheat, coupled with restrictions on global wheat trade, do not translate into a substantial increase in the price of flour products in the Sultanate of Oman.
Prices of wheat have skyrocketing in the wake of the outbreak of war between Ukraine and Russia, both major producers and exporters of the commodity. With other producers curtailing exports of wheat to meet their domestic requirements, the Sultanate of Oman has taken steps to source its requirements from third countries.
Oman Flour Mills, for example, recently announced plans to invest in the agriculture sector in Australia, well-known as a premium producer of grains and cattle. To this end, the company set up OMAUS Pty, a new subsidiary.
While importers in the Sultanate of Oman are trying to diversify their sources of wheat, Omani farmers are pitching as well to support this effort by ramping up domestic production of wheat
Recently, the Ministry of Agriculture, Fisheries and Water Resources signed agreements that will help boost local wheat output to at least 10 per cent of Oman’s total annual wheat requirement of 320,000-350,000 tonnes.
Al Dakhiliyah Governorate currently tops the list of wheat producing regions of the country, with 1,109.6 acres under cultivation, or 45 per cent of the total area under wheat cultivation in Oman.
Salalah Mills Company, another important importer, recently announced that it has awarded contracts for the procurement of 180,000 tonnes of wheat from India and Australia.