With GCC food imports as high as 90 percent, building up strategic reserves is vital
A Saudi watermelon seller in Riyadh. (AFP/Fayez Nureldine)
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With the GCC food import bill projected to hit $53 billion by 2020, the region that imports up to 90 per cent of its food requirement should step up investments in overseas farms, besides building strategic food reserves to ensure food security, a leading food security advocate said.
“Gulf countries must be well prepared to ensure food security given their current state of food consumption patterns, lack of domestic food production and lack of buffer stock,” said Essa Al Ghurair, chairman of Al Ghurair Resources.
Speaking to Khaleej Times, Al Ghurair felt that it is vital for the GCC to encourage public-private partnership in building up strategic food reserves and buffer stocks as per capita food consumption in the region is forecast to reach 971.2kg by 2015 and 983.0kg by 2017, while the population is expected to cross 53.5 million in 2020 from 36 million at present.
According to Alpen Capital’s latest reports on healthcare and food security, the food import bill of the GCC is expected to double from $24.1 billion recorded in 2009 to $53.1 billion by 2020. Although the combined nominal GDP (gross domestic product) of the GCC countries is forecast to surpass $2 trillion in 2020, the ability of the governments to ensure food security would largely depend on cash reserves that in turn depend on oil price, Al Ghurair said.
“The region needs to be prepared by building up strategic food reserves and buffer stocks. Already, GCC countries have started taking food security more seriously after the worldwide food crisis in 2008 that affected the price of food in the region,” Al Ghurair said.
Some of the Gulf countries, including the UAE, are now investing in food production farms in other countries to ensure food security for their citizens and resident expatriates. “This way, they ensure their absolute control over the food production, storage and supply of the agricultural output,” he said.
“If a region’s dependence on basic foodstuff is as high as 90 per cent, it is a matter that deserves attention. Since the food supply chain functions uninterruptedly and efficiently almost 24/7 — most consumers do not realise their level of vulnerability — as long as they find foodstuff readily accessible in supermarkets or on grocery shelves,” said Al Ghurair, who runs one of the largest food grain processing, transportation, storage and logistics bases in the Middle East.
He believes that global warming, food security and sustainability are some of the issues that countries in the Gulf can no longer afford to ignore. “Ensuring food security can boost socio-economic development and social stability in the region.”
The first step towards tackling the food security issue is to build buffer stocks, Al Ghurair said. “It could help countries feed citizens for a limited period. However, countries can develop sustainable agricultural farming and poultry to ensure domestic production that will reduce dependence whilst promoting self-reliance in food. Public-private partnership could help achieve this critical objective.”
Urging industry stakeholders to invest in the region’s food security — which is a shared responsibility of everyone — Al Ghurair pointed out that his company is working closely with the UAE authorities to create strategic food storage as part of the UAE’s food security initiative. “The recent oil price fluctuation provides a wake-up call for those Gulf countries that are more reliant on oil income. A decline in oil price could reduce the current account surplus of the GCC countries and reduce their governments’ ability to invest in ensuring food security,” said Al Ghurair. “The UAE economy is largely diversified, less dependent on oil, and is well cushioned from any external shocks. So, we are in a better position as far as the oil price is concerned. However, as we embark on an exciting journey where our country prepares for the next phase of development to become a smart and happy nation guided by the Government’s Vision 2021, focus on food security could help our ambitious journey ahead,” he said.
The UAE has been very active in its efforts to ensure food security. The country is also promoting the development of aquaculture projects and improving food security through purchase of arable lands in East Africa, Southern Europe and South Asia. Al Dahra, a private firm, which seeks to partner with UAE government to ensure food security, acquired eight agricultural companies in Serbia.
“Food security is not a governmental or a private sector issue. It is an issue that concerns all of us and therefore none of us can avoid our individual and shared responsibility. Public and private sectors in the Gulf countries have already made steady progress in facing the food security and climate challenges issues. Over the last few years, governments and the private sectors have undertaken a number of initiatives to create greater awareness on the subject and prepare to face the challenge of food security, climate change and sustainability head on,” said Al Ghurair.
He said Al Ghurair Foods and Al Ghurair Resources along with its holding company — Al Ghurair Investment — has realigned businesses to support the social and economic needs of the UAE, in line with the UAE government’s vision to create a healthy, prosperous and a happy nation by investing in critical businesses such as food and commodities. Over the past few years, the company has set up a strong food production, storage, transportation and supply infrastructure across the region to ensure uninterrupted and sufficient food supply to feed the population.
Al Ghurair Resources is the agricultural commodities arm of Al Ghurair Investment and the largest grain unloading and handling operators in the Middle East. Al Ghurair Resources currently runs one of the largest food grain processing, transportation, storage and logistics base in the Middle East. It has a 300,000 grain storage facility and operates the largest soya and canola seed crushing plant in the Gulf. Its flour mill has a capacity to produce 2,000 tonnes per day while the soya crushing plant produces 4,000 tonnes of soybean oil per day.
In March this year, the company handled 301,750 metric tonnes of food commodities — a record high level in the country’s history. Al Ghurair Resources owns two terminals at the Port, — Berths No. 3 and 7 – and it was their combined performance that delivered the biggest monthly offload figures ever recorded by the company.
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