Home | Mena Food Market

Culturing a Land of Opportunities to Harvest Tons of Success

The Middle East and North African region have the perfect recipe for a profitable food market; a large and growing population of over 450 million capita, high income rates due to high oil prices and an increasing food production deficit. On the other hand, the region is currently experiencing an interesting expansion of the hospitality sector, which is directly related to developing tourism. The MENA region presents itself as the “land of opportunities” of the food industry, but it is far from being a terra incognita; especially that many countries are already well established which raises competition to its highest levels

In 2006, the United Arab Emirates’ (UAE) population was estimated at 4.5 million with one of the world’s highest per capita GDPs, estimated at $US 49,500, with a $US 3.5-4.0 billion worth of annual food imports, an estimated 85-90 percent of UAE food needs, mainly from the United States, United Kingdom, Germany and France. Food processing attracted the highest level of investment in 2005, which accounted for nearly $US 9 of billion total investment. Between 2002 and 2005, the number of food and beverage processing facilities grew from 225 to 300 establishments. Studies indicate that the total spending by tourists in the UAE will reach US$ 7.6 billion in 2009, Dubai alone is targeting 10 million tourists in 2010. Saudi Arabia invested $US 325 million in the production of processed food, such as potato crisps, candy and biscuits in 2005, out of a total of $US 356 million in investment in that industry in the GCC. On another note, the new Prince Abdulaziz Mousaed Economic City to be developed near Hail and located on the crossroads of many of the Middle Easts trade and transport routes will pivotal to the Kingdom’s agriculture strategy. The planned $US 8 billion development will create the Gulf’s largest agriculture and processing hub with a dry port near a new international airport. In Bahrain, the creation of an encouraging atmosphere for foreign investments and the increasingly growing demand encouraged foreign companies to enlarging their range of products in the Bahraini food market and increasing their investments. For example, Knorr has announced this year it will launch 23 new products in the local Gulf Co-operation Council (GCC) market, including Bahrain. On another note, Kraft Food had announced that it will construct a $US 40 Million cheese and powdered beverages manufacturing plant in the Bahrain International Investment Park to feed this demand for such instant products.

Egyptian gross agricultural product brought about $US 13.8 billion, of which $US 9.8 million were produced by the public sector. The value of the agricultural production reached $US 16.5 billion. Agricultural exports contribute by 20% of total commodities of exports, so it is considered a main source for the national income. Tunisia exports nearly $US 600 million worth of agricultural products, mainly citrus, olive oil, dates and seafood. Most Tunisian farmers grow wheat and barley and face highly variable production due to intermittent droughts. Algeria’s milk consumption is currently rising to the tune of 8 % per annum and totals approximately 3.5 billion L. Retail packed branded powder products account for approximately 0.6 billion L, which ranks Algeria among the world’s five largest markets for milk powder. Local production, however, only meets approximately 10 % of demand. Tourism is Morocco’s second largest earner of foreign exchange (after mining) with 2.5 million tourists visiting Morocco each year. The Moroccan government’s goal is to attract 10 million tourists to its country by 2010.


It is estimated that Syria would produce over 4.7 million MT for crop year 2006/2007, the government of Syria has contracted to export 100,000 MT to Jordan and 300,000 MT to Egypt in 2006 alone. Fruits and vegetables production performance in Jordan has been increasing during the past six years; together they represent almost 70 percent of total agricultural exports. As for Lebanon, the effects of the war in mid-2006 between the Israeli military and Hizbollah forces in Lebanon dominated food industry news in 2007. The country’s agriculture and fisheries industry losses were valued at $US 280 million.


After a ten-year prevention, WTO accepted Iran as an observer member. The beginning of the accession process has faced a delay as a result of Iran’s nuclear issues already, but this process will be started in the near future. As for Turkey, the export of canned fruits and vegetables to the Middle Eastern countries reached $US 49 million and 47,218 tons in 2006. Turkish canned fruits and vegetable exports to North Africa reached $US 8 million in 2006 .

All indicators show that the MENA food industry is experiencing a vast expansion due to increasing demand; some major investments are being made to supply the needed elements. Newly established companies are facing major problems to mark their space and claim their share, it seems that the best weapon to use in this ruthless competition, especially in high income countries is high standards and good quality. At the same time, some countries are still short on providing strategic crops such as wheat and rice, which gives the pricing the higher advantage in the competition.


References:



- Agriculture and Agrifood Canada:www.agr.gc.ca
- United States Department of Agriculture: www.usda.gov
- Egypt State Information Service (SIS): www.sis.gov.eg
- Food & Agriculture Organization (FAO):www.fao.org
- Business Monitor International: www.businessmonitor.com
- Syrian Ministry of Agriculture and Agrarian Reform: www.syrian-agriculture.org
- Export Promotion Center of Turkey: www. igeme.org.tr