During the past decade, the Kingdom of Saudi Arabia has undergone rapid economic growth and development. This expansion stems from the increase in the Kingdom's production of petroleum--oil being the source of most of the country's exports, foreign exchange, and government revenues. However, despite this growth, Saudi Arabia is one of the top foodstuff importers among developing countries. It has been estimated that the value of Saudi agriculture imports in 1981 increased about 33 percent to approximately $6 billion--double the 1979 value and six times the 1976 level. Among agricultural imports, rice is entirely imported from abroad, for the local production of rice is very insignificant. As the main element of the Saudi diet, rice is worthy of study from the production and marketing aspects, as Saudi Arabia is almost entirely dependent on the international market: i.e., dependent on export receipts as well as on import supplies. The purpose of this paper is to point out the factors influencing the consumption of that completely imported staple food. This paper will present first a background of Saudi Arabia, then it will discuss aspects of agricultural development and foreign trade. Next, the quantitative analysis for rice consumption will be presented, and an OLS model will be applied on the available time series data. Following this, the results of the analysis will be used to forecast the future rice demand to the year 1990. In the summary chapter, policy implications and recommendations will be offered.


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