Agriculture boom in GCC: Can we see a benchmark production

2 min read

GCC nations are among the world’s richest nations in terms of oil and gas reserves. The combined population of GCC is approximately 50 million and is expected to increase by 2.4% every year till 2020 and reach 57.6 million by 2020. GDP stands at US$ 1.5 trillion and is likely to increase by 2.5% annually. The rising population and income levels have led to the increased demand for food products. Food consumption in the GCC countries is expected to grow at a CAGR of 3.5 per cent between 2014 and 2020. Food consumption is likely to reach 51.9 million metric tons by 2020. Cereals are the most consumed in this region followed by milk and vegetables. Cereals comprises of wheat, barley, maize and rice. It is expected to account for 46.5 per cent of total food consumption by 2020. The majority of the food consumed is through imports. Up to 75 per cent of food consumed is imported. The value of food imported in 2015 is worth 36.3 billion USD.

Saudi is the largest producer of food in GCC, accounting for nearly 70% of total food produced. It is also the largest producer of wheat in GCC. Saudi when compared to other countries is in a better position in terms of self-sufficiency. Saudi Arabia is the largest food consuming country in GCC, accounting for 64 per cent of total consumption. The population growth in Saudi has led to this increase in food consumption. The rate of consumption is expected to grow by 3 per cent annually by 2020.The research suggests that the food expenditure in Saudi Arabia constitutes 26 per cent of all consumer spending and that food consumption will significantly increase by 55.3 per cent to reach 424 billion riyals ($113 billion) by 2016. Nearly 30% of total food consumed is imported. 24.5 billion USD worth food products are imported in 2015.

UAE is the second largest food producer in GCC, it accounts for 12% of total production. While the consumption accounts for 18.9% of total consumption. The food intake is expected to grow at a rate of 4.8 percent till 2020. The total food imports in 2015 is estimated to cross 5 billion USD.  Increasing population and rising tourism have been acting as catalysts in consumption growth. In recent years, the consumption of meat is increasing at an astonishing pace. Cereals and fruits are most consumed food items in this country.

Oman is the third largest producer of food in GCC and also the third largest consumer of food. Oman produces approximately 8% of total food produced in GCC. Oman consumes 6.3% of total food consumed in GCC. The food consumption in Oman is expected to rise at a CAGR of 3.17 percent by 2017. Cereals and milk constitute for a major portion in the total consumption. The meat consumption is growing at 5.1 percent annually. 70% of the total food consumed is produced in the country. The total consumption is expected to reach 5 MT by the end of 2017.

Kuwait produces almost 5% of total food produced in GCC. Vegetables account for majority of the production. 951000 tons of cereals are consumed in 2015. Milk and vegetables consumption stands at 533000 and 419000 tons respectively. More than 70% of the consumed food is imported from other countries. Kuwait consumes 5.4% of total food consumed in GCC. The food imports for 2015 are estimated to reach 3.6 billion USD. It is expected to grow at a CAGR of 8% by 2020 and reach 5.3 billion USD.

The food consumption in Qatar is expected to grow at a CAGR of 6.3%, which is the highest in GCC region. Qatar consumes 3.9% of total food consumed in GCC.649000 tons of milk and its products are expected to be consumed in 2015 followed by 568000 tons of cereals. 2.1 billion USD worth food is expected to be imported in 2015. The food imports are estimated to increase at a CAGR of 9% by 2020.

Bahrain consumes 1.5% of total food consumed in GCC. 1.1 billion USD worth food is expected to be imported in 2015. The food imports are expected to grow at a CAGR of 8% and reach 1.6 billion USD by 2020. Milk and fruits markets are huge in Bahrain.

Strong GDP growth and increasing population and tourism are expected to drive the food market in GCC. Only Saudi, UAE and Oman produces 70% of their consumption, whereas the remaining countries produces only 40-50% of food. Lack of farming land, scarcity of water and unfavorable climatic conditions are acting as the barriers for cultivation. Keeping in mind the growth in food consumption, the governments in these nations are taking all the measures to improve local production. New technology and latest methods of farming are being implemented to grow crops. Many storage facilities, slaughter houses and farms have been setup and many are in the pipeline.

Mordor Intelligence

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