GCC food consumption to expand at 4.2%
GCC food consumption is expected to expand at a CAGR of 4.2% from an estimated 48.1 million MT in 2016 to 59.2 million MT in 2021, according to latest GCC Food Industry report by Alpen Capital issued today.
This growth is primarily attributable to increase in the consumer base coupled with a higher per capita income, as the GCC economies stage a sustained economic recovery from the recent downturn.
"We expect the GCC Food industry to grow at a sustainable pace. This growth is primarily attributable to factors such as growing population, higher per capita income, and a vibrant tourism market, changing dietary habits and preferences, and increasing penetration of organised retail. Government as well as private sector investments are being channelled towards augmenting the domestic food production capacity and supply, even as securing food sources in other resource-rich countries remains a key priority", says Sameena Ahmad, Managing Director, Alpen Capital (ME) Limited
Saudi Arabia and the UAE are likely to remain the major food consumption centres during the forecast period. The country-wise share in total GCC food consumption is anticipated to remain largely unchanged until 2021. During the forecast period, food consumption in Saudi Arabia is expected to grow at an annualised average rate of 4.2 per cent to 37.7 million MT and that in the UAE is projected to grow by 4.4 per cent to 10.1 million MT. The expected growth rates largely mirror the population and GDP projections for the countries.
"Despite significant headwinds due to fall in oil prices, drop in infrastructure projects, job losses and attendant retail spend, the GCC Food Industry is forecasted to grow in the coming years. Food security remains a key priority for the GCC countries as the reliance on heavy imports continue owing to limited arable land, hot and arid climate, and fresh water shortage. We see several government initiatives aimed not only at enhancing domestic productivity, but also at investing in farmlands overseas to mitigate the risk. Despite this key challenge, the sector remains on the radar of investors who are looking at opportunities to enter the region or a specific country in the GCC to take advantage of what the sector has to offer. This has not only attracted new players to the market but also led to significant consolidation in the segment and we expect this trend to continue", says Mahboob Murshed, Managing Director, Alpen Capital (ME) Limited. - email@example.com