Impact of Water Deficit and Virtual Water Trade on the Costs of Producing and Exporting Saudi Dates

Abstract

The study aimed to estimate the current and projected volume of virtual water trade, evaluate the water balance of dates in Saudi Arabia, and compare the cash return of a unit of water with its cost. Using the partial adjustment model, the most important results were that the water balance deficit in dates amounted to about 9.10 billion m3 during the study period (2000–2021). Based on the forecasting models used, date exports are expected to grow by about 21% annually during the period (2022–2030). By comparing the cash return of a unit of water used in the production of dates with the cost of its production, it was found that it represents 62% of the value of the cost of water used in the production of the unit. It was also found that non-Gulf Arab countries purchase about 45% of the Kingdom’s date exports with a cash return of approximately $0.20/m3 from virtual water. The cash return per unit of water in other countries is estimated to be $0.50 to $0.69/m3. Therefore, the study recommends reconsidering the export of dates and directing them toward high-yield markets to maximize the cash return of virtual water units. KEYWORDS water resources, cash return, water unit, water balance, partial adjustment, foreign trade