Dubai: The UAE government is searching for food producing countries to secure and guarantee the nation's stocks in case of supply shortages, a senior trade official said.
It is also encouraging "strategic investments" in the agricultural sector of food-producing countries such as Vietnam, Argentina, and parts of Africa, said Hamad Bu Amim, Director-General of Dubai Chamber of Commerce and Industry.
Government intervention in the food market is to be expected amid surging global food costs and regional political turmoil.
Countries across Africa and Asia are increasing imports or releasing supply from state reserves to cool down inflation as rising demand and adverse weather cut harvests and push food prices to a record, according to a Bloomberg report.
The political unrest sweeping the Middle East, from the toppled regimes in Tunisia and Egypt to the protests in Yemen and Bahrain, has affected food trade in the short term, according to international trade commissioners speaking at Gulf Food, the region's largest industry event.
Disruptions
"There is an impact on imports and exports, but it is temporary," said Abdul Rahman Raouf, the Minister Councillor at the Egyptian Embassy.
The closure of some government authorities, imposed curfews, transport slowdown and labour strikes during the protests in Egypt led to a pile up of undelivered exports, he said.
"In Egypt there is a short term impact because of disruptions in the distribution channels," said Francois Sporrer, France's Trade Commissioner. France exports wheat to Egypt, the world largest wheat importer, and with the price rises in wheat the market will have to adjust, he said.
The higher costs of wheat, sugar and dairy products sent the United Nations' World Food Price Index to an all-time high last month. The jump has contributed to democratic revolts in Tunisia and Egypt, as well as other Arab nations.
However, the political unrest maybe a long term gain for traders as it paves the way for reform, democracy and stability, said Raouf.
Although the UAE is a net importer of foodstuff, importing about 90 per cent of its food needs, it has not seen a significant impact yet on its food imports from the political unrest sweeping the region, the international trade commissioners insisted.
"The domestic market is full of opportunities: A diverse population, high purchasing power, modern infrastructure, active tourism and a powerful trade hub," said Sporrer.
The elements that heated protests to a boiling point in other countries do not apply in the GCC, he said.
"The economy is well managed. There are no elements of instability like other countries. There is a huge difference in purchasing power and employment," he said.
French food exports to the region grew by 45 per cent to reach 1.525 billion euros (Dh7.6 billion). France exports 200 million euros worth of food, mainly gourmet, and food equipment.
"Because of its climate, the GCC will continue to rely on food exports, which presents us with an opportunity to expand exports, said Jude Akhidenor, regional director of the Agriculture Trade Office of the US Consulate.
US food exports to the UAE reached $890 million (Dh3.2 million) in 2010, making it the 19th biggest market for the US. Its food exports to the GCC grew from $800 million in 2000 to over $2.34 billion in 2010 and is one of the top 10 markets for US agriculture exports, he said.
Young population
The increase in middle-income families, a young population base and acceptance of Asian food, makes the GCC a lucrative market for Singapore, said Dean Tan, Centre Director of the International Enterprise Singapore, the only Asian country represented at Gulf Food.
Singapore's food exports to the GCC grew from $57.04 million in 2001 to $107.38 million in 2010, he said. It is Singapore's eighth fastest growing market for food and beverages.
Germany is also eyeing the Middle East market to supply food processing technology and machinery, said Dr. Peter Gopfrich, CEO of the German Emirati Joint Council for Industry and Commerce.
