Hike expected in demand for grain and feed in the UAE

Hike expected in demand for grain and feed in the UAE

The overall consumption of grain and feed in the United Arab Emirates (UAE) will grow nearly 6% over the next year, thus boosting imports, finds a USDA GAIN report. 

Provided economic conditions remain stable, the report forecasts that the UAE’s livestock sector would expand rapidly over the next decade.

The USDA also attributes greater demand for grain and feed in the UAE to the steady growth in population and tourism, large-scale investments in preparation for the UAE-hosted World Exposition in 2020, and a UAE food security initiative that focuses on improved food processing and grain storage capabilities within the country. 

These variables contribute to the UAE’s increased need for wheat, barley, rice, and corn,” noted author of the USDA report, Fayrouz Zghoul.

The UAE’s severe climatic conditions restrict domestic grain production. There is no reportable production of wheat, barley, rice, or corn in the region due to extreme heat, low rainfall, and the prevalence of desert conditions, so it relies heavily on imports. It sources around 80% of its food and feed, including raw materials, from other countries, he said.

Barley, corn, wheat import outlook  

The USDA’s foreign agriculture service (FAS) in Dubai said it expects, however, total barley imports to dip slightly in MY 2017/18, reaching 450 thousand metric tons (TMT) in total: “This 11% decrease is a result of overly aggressive importing in 2016 when the UAE government subsidized barley imports for local companies. This move has created a surplus of barley stocks for MY2017/18,” wrote Zghoul.

Australia remains the major supplier of barley to the UAE with nearly 85% market share. Camel, dairy cattle, sheep, and to a lesser extent, poultry producers in the UAE use barley in feed.  

In MY 2017/18, FAS Dubai expects corn consumption to reach 620 TMT, up 10% from MY2016/17. 

An expanding feed market as well as a stronger demand for locally produced poultry has contributed to the uptick in field corn consumption in the UAE, noted the report. Corn is a prime feed ingredient for the UAE’s domestic production of camels, dairy cattle, sheep and poultry.

In MY2016/17, major corn suppliers to the UAE were Argentina, Australia, and Brazil.

FAS Dubai said it sees wheat imports increasing 3% to reach 1.3 million metric tons (MMT). Russia, Canada, Lithuania, and Australia remain the largest suppliers of that grain to the UAE. 

“According to official 2016 data reported by the UAE Federal Competitiveness and Statistics Authority, UAE re-exports of wheat reached 56 TMT; however, according to the Global Trade Atlas, Iran imported 285 TMT worth of wheat from the UAE over the same time period.  Anecdotally, UAE trade contacts indicate a slight decline in re-exports of wheat due to an increase in local consumption within the livestock sector,” reported Zghoul.

There are very few restrictions on grain imports into the UAE, he said. Most agricultural products, including wheat, barley, rice, and corn are exempt from import duties.

“The UAE government encourages the open trade of these commodities as it supports the country’s goal of being the regional trade center for the Gulf Cooperation Council (GCC) region.”

Grain storage  

In early 2016, a strategic grain storage terminal, Etihad Mills, opened within the Fujairah Free Zone to help ensure food security within the UAE:

“This facility is responsible for operating and managing a strategic supply of grain such as wheat, corn, and rice.  It operates 20 silos in the western Emirate of Fujairah and has a total storage capacity of roughly 2.7 TMT. The UAE aims to build domestic and regional capabilities in grain trading to ensure a consistent supply of grain to the UAE market and greater GCC region. The facility is still in the testing phase of operation,” said the author.

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