SUBSCRIBE

Breaking News on Food, Beverage & Supplement Development - Asia PacificEU edition | US edition

Headlines > Markets

Read more breaking news

 

 

GCC food imports to double in a decade to $53bn

Post a commentBy Eliot Beer , 28-Aug-2014

GCC spending on food imports will more than double in the decade to 2020 to reach US$53.1bn, according to an Economist Intelligence Unit (EIU) report.

The 2008 food price shock – which saw global food prices rise dramatically, and GCC food import spending jump 41% year-on-year to US$25.7bn – is still making itself felt in Gulf policymaking, claims the EIU report “The GCC in 2020: Resources for the future”. The report was sponsored by the Qatar Financial Centre Authority.

Focus on security

By 2020, the EIU forecasts food imports will make up 8% of all GCC imports by value, on the back of a long-term drive to ensure sufficient food supplies for the Gulf countries’ fast-growing populations. Faced with price rises driven by speculation and poorly-functioning market mechanisms, along with export bans in key supplier countries, GCC policymakers made a shift towards protecting food supplies to maintain food security, the report suggested.

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,” said Ruth Meinzen-Dick, senior research fellow at the International Food Policy Research Institute, quoted in the EIU report.

Because of the lack of water throughout the Gulf, long-term agricultural development is not a viable option, the report noted – more than 90% of Saudi Arabia and Oman’s water supplies are used for agriculture, with the figure for the UAE at more than 80%. While some GCC governments continue to protect existing agricultural enterprises, others such as Saudi Arabia are actively working to reduce crop production, in favour of switching to imports – often from GCC-owned lands in other countries.

Buying up land

The main strategies are buying or long-term leasing land in developing countries to use for export-oriented farming. If oil prices average US$70 a barrel per year over the next decade, the GCC’s cumulative current-account surplus would reach some US$240bn by 2020. If just 5% of this total were to be invested in agricultural projects each year, this would provide an average investment fund of US$10.6bn per year – twice the annual GDP of Rwanda – or a cumulative total of US$106.1bn,” said the report.

Aside from major crops, the report said GCC countries were likely to maintain their production of dairy and fish, along with non-water-intensive crops such as dates. It also predicted a rise in agro-processing industries in the region, for the processing of raw materials into marketable food products.

Post a comment

Comment title *
Your comment *
Your name *
Your email *

We will not publish your email on the site

I agree to Terms and Conditions

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.

Key Industry Events

 

Access all events listing

Our events, Events from partners...