Food import bill of GCC region will rise to over $53 billion by 2020 as soaring population and up to 90 per cent reliance on imported products foster long term supply concerns, according to a study.
GCC governments must focus on strategic diversification and domestic initiatives for future sector sustainability, experts say.
According to the Economist Intelligence Unit (EIU), GCC food import demand is forecast to hit $53.1 billion by 2020, up from US$25.8 billion just a decade ago, and with 80-90 per cent reliance on imported foodstuffs, the impact of price increases caused by poor harvests, political instability, supply chain interruptions and a non-agricultural landscape could have devastating long-term food security consequences.
“Food security throughout the region will no doubt once again dominate show floor discussion, as regional demand for food imports rises due to an expanding population expected to reach 50 million by 2020, a booming tourism industry, increasing per capita income and limited water resources,” said Mohammed Jalal Al Rayssi, director of communication and community service division at Abu Dhabi Food Control Authority (ADFCA).
The EIU's 2014 Global Food Security Index, which ranks countries based on food affordability, availability, nutritional quality and safety, placed Kuwait in 28th place, leading the region with an overall 72.2 per cent rating, followed by the UAE in 30th spot with a score of 70.9 per cent and Saudi Arabia 32nd at 69.6 per cent.
“While the region’s own food production capacity is naturally stymied by a lack of arable land, there is much being done to address long term food security from significant government investment into farming projects from Eastern Europe to Africa, as well as domestic initiatives, which while incurring substantial costs, are nonetheless adding much-needed supply at source,” added Al Rayssi.
The Abu Dhabi farming industry is reportedly set to produce up to 38,000 tons of fruit and vegetables in the winter months while Qatar is similarly looking into sustainable agricultural development. However, the high cost of large-scale domestic agriculture initiatives has proved extremely challenging with Saudi Arabia, for example, calling time on its experimental wheat production program with plans to revert to an import model by 2016.
According to Alpen Capital’s 2013 GCC Food Industry Report, the GCC region will consume 49.1 million tons of food annually by the end of 2017 with the UAE currently the largest per capita consumer at 1,486 kg per year. This tops neighboring Oman at 1,095 kg per capita per annum, with Saudi Arabia at 872 kg, Qatar with 852kg, Kuwait at 634kg and Bahrain 453 kg.
“The report indicates that over the three years, food consumption in the region is expected to grow at a Compounded Annual Growth Rate (CAGR) of 3.1 per cent and so it is imperative that we continue to diversify our import sources and proactively seek out partnerships with other countries and producers who are willing to become part of the food security solution,” added Cook.
ifpinfo
22 October
