Dubai food trade gears up for major jump in exports

Population growth and rising incomes create demand in GCC

Chefs demonstrating cooking techniques at a pavilion at Gulfood 2015 in Dubai. Photos by Leslie Pableo/ Khaleej Times

Dubai — Rising global demand along with increasing domestic industrial output and a growing appetite for new export markets have created a favourable situation for the UAE foods sector, according to latest reports.

Dubai Exports, the export promotion agency of the Department of Economic Development in Dubai, said the food sector in Dubai already accounts for 10 per cent of the emirate’s industrial production.

Referring to the sector’s performance during the first nine months of 2014, it said food exports from Dubai last year is estimated to reach Dh9.7 billion, an increase of four per cent over Dh9.3 billion achieved in 2013.

Food re-exports from Dubai is also expected to increase 10 per cent in 2014 from Dh10.6 billion in 2013.

“A number of factors have evolved in recent years, enabling UAE-based food exporters to make inroads into new markets. China remains a top destination while population growth, rising middle class and high disposable incomes are creating new demand in GCC, Russia, CIS and African countries,” said Saed Al Awadi, chief executive officer of Dubai Exports.

Large and sustained domestic consumption is also enabling Dubai’s food sector to remain robust and globally competitive.

Business Monitor International (BMI) predicts local food consumption to cross Dh33 billion in 2015 and reach Dh35 billion in 2016. Since local companies are able to invest in advanced production, packaging and distribution capabilities, quality food products from Dubai are competing on the global stage.

“With a solid industrial base of over 600 manufacturing firms, mostly small and medium enterprises, and a diverse product range, Dubai’s food trade is making a strong pitch to be a major supplier to these markets, with a high degree of success,” Al Awadi said. 

Made in UAE food

Emirati inspecting different varieties of tea displayed at a stall in the exhibition.

Saleh Abdullah Lootah, chairman of Food & Beverage Manufacturing Business Group (FBMG), echoed similar views and said the UAE food and beverage sector is showing steady growth year-on-year.

Talking to media on the sidelines of Gulfood 2015, he said manufacturing of high quality, competitive and value-added products, tax-free business system, investment friendly environment are contributing factors in propelling the UAE as an F&B manufacturing hub in the region.

The Dubai Chamber of Commerce and Industry also hosted Gulfood Connect, a networking breakfast, at the chamber premises on Monday to highlight Dubai’s status as a major food importer and re-exporter to visiting international delegates of Gulfood 2015.

In his welcome address, Hassan Al Hashemi, vice-president, international relations, Dubai Chamber, said the UAE’s reliance on food imports, which amounts to more than 80 per cent of its food needs, is raising the prospects for the growth of the food sector.

Referring to Euromonitor data, he said spending on food and beverages in the UAE is expected to record a compound annual growth rate of eight per cent during the period 2012 to 2018. He also pointed out at the expected compound annual growth rate of per capita consumption of fresh food in the emirate will amount to 5.5 per cent during the period 2012-2018.

A Dubai Chamber presentation said the UAE’s international trade in food and beverages totalled $20.7 billion in imports, and exports amounted to $13.4 billion during 2013, while Dubai’s imports of food and beverages during 2013 amounted to $12.3 billion, and exports and re-exports clocked $7.4 billion.

“For food products from Dubai, the export destinations are also getting more and more diverse, providing the sector with a cushion against market fluctuations. For example, Dubai’s food traders exported to 162 destinations, more than any other sector, during the first nine months of 2014 while the number of destinations for the whole of 2013 was 169,” Al Awadi said. 

Halal food

BMI said global demand for halal processed food is projected to grow over the next five years, driven by rising awareness, a rapid growth in the Muslim population and rising incomes in majority&Muslim countries. Egypt, Indonesia and Turkey offer large consumer bases for halal products.

— muzaffarrizvi@khaleejtimes.com