ABU DHABI – The value of food imports to the GCC countries will more than double over the next decade to satisfy a growing regional population with more money to spend as the process of economic development continues.
New research shows as food consumption increases, total GCC food imports will reach $53.1 billion by 2020, an increase of 105 per cent from 2010’s import bill of $25.8.
Rising at a rate of 4.6 per cent annually from 2011-2015 in a region low on agricultural land and natural water sources, and forced to import 90 per cent of its food products, food consumption in the GCC will reach 51.5 million tonnes per year during this period.
Food imports to the UAE will reach $8.4 billion by 2020, a 133 per cent increase from 2010 $3.6 billion
Food imports to Saudi Arabia, which currently accounts for 64.9 per cent of total GCC food consumption, will reach $35.2 billion by 2020, a rise of 105 percent from $16.8 billion in 2010.
Kuwait’s food imports will grow 130 per cent to $5.3 billion, Oman’s imports will reach $4.8 billion, up 128 percent, while Qatar will a rise in its food import bill by 153 per cent to $3.3 billion.
Mohamed Jalal Al Reyaysa, chairman of the higher organising committee for SIAL Middle East and the spokesperson of Abu Dhabi Food Control Authority, says that population growth, increasing income per capita, and rapid urbanisation are the main demand factors driving food imports into the GCC region.
“GCC countries currently import 90 per cent of all food products,” said Al Reyaysa. “With its population growing at three times the global average, the GCC region is increasingly depending on imports to meet food requirements.
“Adding to the challenge is the fact that GCC countries are some of the most water scarce in the world, with only 1.4 per cent of land suitable for agriculture. Food security therefore is of prime concern and major challenge for the regional governments.”
Food consumption in the UAE is projected to grow by 5.4 percent from 7.8 million tonnes in 2011 to 9.7 million tonnes in 2015. With just 0.8 percent of its land suitable for cultivation and agriculture contributing only 0.9 per cent to the country’s GDP, the UAE, like Oman and Qatar, imports over 75 per cent of the total …read more
The following article By Nada Al Rifai kindly reproduced from Zawya illustrates the point clearly
GCC expansion: More Gulf food security?
In the face of growing economies and rising populations, food security is fast becoming a critical issue for GCC countries. Socio-political problems that arise from food price inflation and some related unrest witnessed in many countries of the Arab world have also created an added sense of urgency.
The induction of Morocco and Jordan into the Gulf Cooperation Council would present an opportunity to unify efforts and complement strengths among these countries in the agribusiness sector. This extended cooperation would improve food security for Gulf nations, provided proper government policies are adopted.
Wealthy GCC countries are extremely dependent on food imports to meet their consumption needs. “Although GCC countries are amongst the world’s richest in terms of oil and gas reserves and per capita wealth, they are highly dependent on the world food markets,” Sameena Ahmad, Managing Director at Alpen Capital, wrote in a recent research report.
This high dependence on imports makes Gulf countries vulnerable to shocks in global food commodity prices, similar to the one that occurred in 2008. The food price spike of 2008 will stay in the background of GCC policymaking for many years to come.
“A number of Gulf countries were on the market for food at a time when prices had gone up, and some exporting countries had put up export bans, especially for rice — creating a nervousness that even if they could afford it, they couldn’t get it,” Ruth Meinzen-Dick, senior research fellow at the International Food Policy Research Institute, said in a research report by the Economist Intelligence Unit.
EIU forecasts even more growth in GCC food imports to reach USD 53.1 billion by 2020, or 8% of all imports in value terms, with Saudi Arabia alone expected to need USD 35.2 billion worth of food imports by 2020. The expected rise in income and population for GCC countries consequently commands higher food needs.
By 2020 the GCC population is forecast to rise by 30% over the level in 2000 to reach 53.5 million, according to EIU. In addition, it expects the region’s real GDP to grow by 56% over the same period, with nominal GDP set to reach more than USD 2 trillion in 2020.
Over the short term, GCC countries will remain vulnerable to higher food import costs which they can easily finance with a massive surplus from oil revenues. However, with around 90% of its food needs imported, there is also the added risk of embargoes on food exports by some countries. The Gulf countries thus have clear incentives to adopt policies that provide long-term solutions for this issue.
More Cooperation, Better Security
The region can be better positioned in terms of food security by expanding agricultural cooperation with Morocco and Jordan with more tax breaks and less trade barriers, fostering a more liberalized agricultural trade among these countries.
In addition, GCC governments are seeking to outsource agricultural production by acquiring land abroad as one of the strategies to ensure more food supply; especially since only 1.7% of the total GCC land area is arable. Morocco’s wealth of exploitable agricultural land creates an opportunity in line with that strategy.
A GCC committee has been formed for the task of hunting for overseas land suitable for agricultural investments. Saudi Arabia and the UAE together already hold around 2.8 million hectares of overseas land in countries that have under-invested in their agricultural sector, primarily in North Africa and South Asia, according to media reports.
“The Kingdom of Saudi Arabia and the United Arab Emirates have been pioneers in utilizing resource-rich land in foreign developing countries, namely Pakistan and Sudan, for producing agricultural products and then exporting them back to the Gulf countries.” Mhammad Biygautane, a researcher and expert in North African politics and governance at the Dubai School of Governance (DSG), told Zawya.