(MENAFN - Arab News) A decision by the Saudi Higher Economic Council is expected to ban export of goods subsidized by the Kingdom, wrote Al-Eqtisadiah business daily.
Flour receives more than 70 percent of the government support. The subsidy is essential to the commodity's stability, as it prevents the price from increasing to unaffordable levels.
Market sources told the newspaper that huge quantities of flour are being exported, with merchants taking advantage of the difference in prices to export the commodity to neighboring markets.
Walid Al-Khuraiji, general manager of the Grain Silos and Flour Mills, said no subsidized goods should be exported.
"There is a study underway to assess the value of the subsidy in each exported product that contains flour. A decision is expected in the coming months in this regard," said Al-Khuraiji.
The subsidy provided by the Kingdom is to help citizens, not to help exporters, he said.
According to the sources, new legislation, which will be enacted soon, is being worked out to correct the situation. Under this any company that wishes to export goods should pay back the value of the support it received. This was the case with the poultry sector, when a ban was lifted after restoring the value of the subsidy.