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RIYADH (Reuters) - Saudi private sector company Hail Agricultural Development Co (Hadco) has picked Sudan for its first investment in farming abroad under a Saudi government scheme to ensure steady food imports, it said.
Hadco has recently acquired farming land in Sudan which would be suitable for planting wheat, corn, soy and livestock feed, it said in a statement posted on the bourse's website.
It is conducting tests on the planting of wheat and corn.
"This project represents the firm's initial foreign investment as it is in the process of studying opportunities available in several countries," the company said.
"The company will decide to deploy the full investment for the project with an estimated cost of 170 million riyals after the completion of the experimental work."
The Saudi government has been encouraging private and public firms to invest in farm projects abroad after the kingdom last year abandoned a 30-year self-sufficiency programme in wheat which coincided with a surge in global prices of grains.
State-owned Saudi Industrial Development Fund has agreed in principle to contribute about 60 percent of the project's cost, Hadco said.
Saudi Arabia started to reduce purchases of wheat from local farmers by an annual 12.5 percent as of this year.
The world's largest oil exporter said last month it has received the first batch of rice to be produced abroad by local investors as part of the so-called King Abdullah's Initiative for Saudi Agricultural Investment Abroad.
The Saudi government said last year it would spur global investment through an investment firm owned by public and private investors to ensure long-term food security.
Ethiopia, Turkey, Ukraine, Egypt, Sudan, Kazakhstan, the Philippines and Vietnam were among countries Saudi officials and investors were considering for such projects, according to state media.
Agriculture Minister Fahd Balghonaim has said Saudi Arabia would focus on items that cannot be grown in the kingdom or need plenty of water.