Saudi hopes dates will enliven remote conservative town

BURAIDAH, Saudi Arabia (Reuters) - In a far-flung corner of Saudi Arabia, a dusty town where life is harsh and beliefs are rigid hopes to turn itself into a new trading hub for an ancient desert commodity: the date.

Officials hope that expanding the palm date trade in Buraidah, which lies in the remote inner province of Qassim, will help improve the economy of a region less developed than other parts of the world's biggest oil exporter.

"The date market has a huge importance for the region and helps Saudi young people to find jobs," said Khaled al-Qaidat, a local official who is overseeing the market's expansion, as farmers unloaded their dates from pickup trucks for auction.

Saudi Arabia's unemployment rate hit 10.5 percent last year and regions such as Qassim have few industries offering jobs. Finding jobs for the fast-growing native population of 18 million is a key challenge for the kingdom's leaders.

Unlike other Gulf countries, such as Kuwait where citizens are entitled to state jobs, many Saudis have to work as security guards or taxi drivers.

But in Buraidah, things are looking up: Every day up to 1,500 pickups arrive full with dates from farmers or traders from across the kingdom or neighbours such as Jordan, Kuwait or Qatar, according to Qaidat.

The authorities plan building a warehousing complex to allow year-round trading, now limited to the August-October season and there are even plans to introduce electronic trading to reach buyers in Europe and Asia.

The growing number of visiting date merchants means a Moevenpick luxury hotel has set up shop, and the government is building another large hotel in the town centre.

While the kingdom is famous for its oil reserves, date production has been on the rise for years, as the industry in former major exporter and neighbour Iraq has been ravaged by violence.

The Gulf Arab kingdom is now the third largest dates producer after Egypt and Iran, based on 2008 figures by the U.N. Food and Agricultural Organisation (FAO).

Annual production has risen to 986,000 metric tonnes, a third more than ten years ago, it said.

Qassim is one of the most conservative pockets of Saudi Arabia and home to an austere version of Sunni Islam, and analysts say many young men from the region joined Osama bin Laden's al Qaeda in Yemen or militant groups in Iraq.

BIG PLANS FOR GROWING INDUSTRY

While most of arduous date picking from palms is done by foreigners, Saudis have started joining the industry.

"More Saudis are demanding work. The number has been rising every year," said Abdul-Aziz al-Twergy, general manager of local date producer Hadhim, which plans to expand production to 16,000 tonnes a year in coming years, up from currently 5,600 tonnes.

About half of the 3,000 people involved in the market -- traders, farmers, administrative staff or drivers -- are Saudis, he estimates.

The slated electronic market will only employ Saudi citizens and one plant now has a section for women willing to work.

The Buraidah initiative is part of a broader government push to lower dependency on oil and build up industries to find jobs for 18 million Saudis -- 70 percent of whom are under 30.

Developing food firms is one focus, along with petrochemical companies and banks. On the Saudi bourse, the food and agricultural index has risen 10 percent this year as firms such as Almarai or Savola have become regional players.

The date industry contributed only 0.4 percent to 2009 gross domestic product but there is big potential and dates need less water than other products such as dairy, said John Sfakianakis, chief economist at Banque Saudi Fransi.

"Saudi Arabia has a clear and obvious comparative advantage in dates production in all shapes and forms as it falls within the natural climatic and water usage conditions," he said.

And dates on the Buraidah market, which has a daily trading volume of almost $7 million according to dealers, are just the start of an expanding production line -- there is date juice, syrup, sweets, cakes and a local firm makes date ice cream.

Buraidah's date trade is attracting some loyal clients. Struggling to make himself heard over the noisy auctioneering after the last evening prayers, Kuwaiti government employee Sultan Sulail says he tries to come here every time he visits Saudi Arabia.

"It's a nice market. You enjoy buying here."

(Editing by Matthew Jones)

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