A new approach on food-issues from the Gulf countries
Meat consumption in the area is resumed at red meat, poultry, camel, beef, and buffalo and the imported volumes have to be halal certified. In 2014, meat consumption in GCC area stood at 2.8 MT from which 1 million MT was locally produced covering 34.6% of the region’s demand, according to an Alpen Capital analysis. UAE and Qatar are the lowest in selfsufficiency while Saudi Arabia has the biggest ratio in from this perspective.
A global perspective
A new strategy is recently applied by the GCC Members States in order to achieve a higher ratio of food security and this approach is played at a global level. From imports of livestock and investments in aquaculture or in research and
technology to farming huge parcels in different countries, the six nations club have started a serious reform in agricultural policies. In 2016, Global Food Security Index has shown an improvement in overall scores of food security for each of the GCC nations.
Saudi Arabia has started this trend investing abroad in order to respond to a growing demand for meat and eggs on the domestic market. Investments of Saudi government were made in Sudan, Lebanon, Syria and Egypt but the unstable political climate relocated some of the businesses to Australia, Pakistan, Europe or North and South America.
Saudi Agricultural and Livestock Investment Co (SALIC) is the main instrument used by Riadh in order to invest directly or to develop joint ventures across the world. By now, SALIC increased its investment in G3 Canada LTD., its agri-logistics joint venture JV with Bunge Ltd., from 49% to 75%. Also, an investment made in Minerva Foods SA, a Brazilian beef exporter, by buying a stake of 20% for 188.4 million dollars has transformed SALIC in a stakeholder of one of the biggest beef producers from South America. Minerva Foods is now exporting beef to 100 countries.
UAE has followed the example and invested in countries like Namibia, South Africa, Tunisia, Morocco, Algeria, Sudan and Egypt to
secure food supply. In the meantime political uncertainties from some of these countries have driven the investments to regions like Eastern Europe, Australia, North and South America. A number of a projects developed by UAE have given the country a recognition from FAO for the efforts made to secure the food supply.
Kuwait is setting new goals in achieving food security by developing several partnerships with authorities from Mexic, Sudan
and Albania using Public Authority for Agriculture Affairs and Fish Resources (PAAF). Another instrument used is Kuwait Investment Authority, a sovereign wealth fund present as a stakeholder in different international food companies.
Oman is also aiming big in matters of food security by increasing domestic production, as part of its plan to raise the agricultural
contribution to 3.1% of the GDP by 2020, from 1.6% in 2015. In the meat industry, the country is decided to boost self-sufficiency of red meat and poultry with several mega-projects undertaken by Oman Food Investment Holding. The total amount of the investment is set to $699 million and the facilities are expected to commence production in 2019.
On the long-term, the Sultanate is looking to cover the shortage of red meat, which is now at 80%, with a $95.9 million investment made by Al Bashair Meat. Also, Osool Poultry SAOC announced the intention to establish a major project for broiler breeding and hatching operation with a total investment of $158.4 million. The project will help the country to achieve 70% self-sufficiency in poultry meat production by 2030.
Along with that, the development of Fisheries Industrial Zone in Al Duqm SEZ is expected to expand the capabilities of Oman’s
fish industry with 60 processing facilities, cooling and freezing stores, and ship maintenance and repair workshops. From all the
GCC nations, Qatar is now probably the most interested to achieve a higher level of food security.
Projects initiated before the Gulf crisis in may 2017 are talking about a $55 million meat processing plant, a $206 million chicken
farm complex and a $63.2 million invested in an aquatic research centre. Bahrain it’s putting its financial reserve on short-term
and long-term measures that could help the country to increase the food self-sufficiency. The expansion of the food sector is encouraged for both private and public sector with an accent on poultry and fish industries. Also, Bahrain is one of the investors in aquacultural projects developed in Egypt.
A rise in consumption
With a projection of growing population at a CAGR of 2.3% from an estimated 53.9 mil. in 2016 to 60.5 million in 2021 GCC nations are also expecting changes in consumption and consumer habits. Food consumption in the GCC is expected to expand at a CAGR of 4.2% from an estimated 48.1 mil. MT in 2016 to 59.2 mil. MT in 2021. Meat consumption is forecasted to grow a CAGR of 3.4% in the mentioned period with Saudi Arabia and UAE likely to remain the major food consumption centres. Until 2021,
CAGR rate of growth for meat in any of the six countries is as follow: Saudi Arabia-3.9%, UAE2.8%, Kuwait-2.8%, Oman-2.4%, Qatar-3.7%, Bahrain-3.1%.
Photo Source: Flickr/Michael Cannon
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