Beefing up food relationships

Though blessed with an abundance of hydrocarbon resources, the arid Gulf relies heavily on food imports. Food security is therefore fast becoming a critical issue, even for wealthier countries in the GCC, many of whom face tighter global food markets because of trading partners’ strained export surpluses, declining domestic food production and population growth. Many countries in the Gulf, fearing that someday they might not be able to secure enough food for their populations, have increased government subsidies, built up strategic storage, and invested in agriculture overseas.

Australia has emerged as a major provider of meat to the UAE and the wider Middle East and North Africa (Mena) region, with meat exports reaching 110,000 tonnes in 2011. Mutton led the volumes followed by lamb and then beef.

“On the back of a high Australian dollar and lower supply over the past 12 months, the Mena still has an unquenchable thirst for Australian beef and sheep meat,” says Jamie Ferguson, Regional Manager, Mena, at Meat & Livestock Australia. The organisation provides marketing and research and development services to Australia’s cattle, sheep and goat farmers and has more than 47,500 livestock producer members.

Australia is now the UAE’s third-largest supplier of food for local consumption as well as for re-export to other GCC countries, and food imports are mainly focused on Australian meat. In 2011, the UAE replaced Egypt as Australia’s number one beef and lamb export market in the Middle East, with red meat imports reaching 28,804 tonnes, according to MLA. The trend has continued into 2012, with the UAE overtaking Saudi Arabia as the largest importer of red meat products. Australian steak and mutton are widely available across supermarkets in the Emirates.

“Australia exported 7,431 tonnes of beef to the UAE, Saudi Arabia and Kuwait in 2011,” Belinda Roseby, MLA spokesperson, told GN Focus. “Of lamb, we were exporting 9,413 tonnes to Dubai and 3,074 to Abu Dhabi. Other export countries for lamb and [mutton] were Jordan, Saudi Arabia, Qatar and Iran.”

Last year, the UAE’s beef imports increased sharply by 28 per cent from 5,801 tonnes in 2010.

MLA forecasts indicate demand is likely to strengthen, with Australian red meat well placed to seize future opportunities to deliver quality beef and lamb. In the UAE’s food service sector alone, beef sales are expected to grow 152 per cent, alongside a 290 per cent increase in lamb sales by 2014. Food purchases overall are predicted to grow by 191 per cent during the same period.

To capitalise on these shifts, MLA relocated its Mena regional office from Bahrain to Dubai in April 2011. Ferguson attributes the move to Dubai’s increasing importance as the transit hub not just for the Mena region, but also for the Northern and Southern hemispheres.

Halal choices

Halal-certified food is of growing importance to trade between the UAE and Australia, leading to the launch of specialised halal-certification bodies in Australia. Of these, the Islamic Coordinating Council of Victoria (ICCV) is the largest and is responsible for the certification, monitoring, and supervision of halal food exports from Australia. Other such organisations are Australian Halal Food Services in Queensland and Halal Australia in New South Wales.

A halal certificate issued by a UAE-approved Islamic centre in Australia is compulsory for importing any meat, poultry products or products containing gelatine. The Australian Government Authorised Halal Programme (AGAHP) ensures high-quality products that are strictly halal, according to the MLA.

Australian halal exports are estimated at around $4 billion (Dh14.68 billion) of total agricultural exports of around $35 billion, according to the Australian Bureau of Agricultural and Resource Economics.

“There are no issues with halal certification,” Mike Eathorne, General Manager of Meramist, an exporter of fresh and frozen meat based in Queensland, tells GN Focus. “I believe that there is enormous potential in the Middle East, but the biggest issue we will have to overcome is cheap imports from Pakistan and India.”

Strategic investment

To further secure food imports from Australia, the UAE is also planning to acquire farmland in Australia, after it has invested massively into farmland in Ethiopia, Sudan and Eastern Europe to grow food for importation back to the UAE.

On a visit to Australia in 2011, Sultan Bin Saeed Al Mansouri, the UAE’s Minister of Economy, said the UAE is keen to “open new prospects for cooperation in the fields of agriculture and livestock production”, according to WAM. He added that the UAE is seeking possibilities of investing in agriculture lands to produce basic commodities to support the country’s strategic reserves.

Ferguson says the region has opened up considerably in the last 15 years or so and demand for Australian meat has diversified from lamb alone to beef and other products.

“At first, grass-fed beef led the volume statistics but in the past three or four years remarkably the volume of high value grain-fed products are eating up the beef market share,” he says. The softer, sweeter tones of grain-fed meat are particularly popular with the ladies although the robust grass-fed product accounts for 85 per cent (2011-12) of beef exports to the region. Also trending higher as the market matures are high value products such as wagyu beef and organic beef and lamb, albeit their volumes are smaller. Suppliers such as the award-winning Australian Agricultural Company have been providing halal wagyu and grain-fed beef to the region for some time now, particularly to the UAE (where it has had a long term partnership with Atlantis The Palm), Jordan, Saudi Arabia, Qatar and Egypt. The company’s most luxurious beef brand, Master Kobe, won a gold medal and was named Champion of the Wagyu at the Sydney Royal Fine Food Show in September.

On the processing side, exports of chilled lamb overtook frozen in 2011-12, rising from 45 per cent to 57 per cent. “This shows that the market recognises the high standard of Australian packaging and processing is allowing fantastic shelf life,” says Ferguson.

In another move, Australian exporters are seeking to capitalise on camel meat. Camels now roam around in numbers that exceed a million, about 10 per cent of the world total. What was once regarded as a pest is destined to be a new export hit, along with kangaroo and crocodile meat, according to the Central Australian Camel Industry Association (CACIA).

As an alternative to government-controlled culling programmes, CACIA has developed markets for trade in live camels and camel meat, says Gary Dann, owner of Territory Camels, a camel farm in the Northern Territories, and member of CACIA.

“All our camel production is halal-certified, as we believe our best markets will be Muslim countries and Arab immigrants,” Rob Black, Director of Samex Australian Meat Co, a camel meat producer, tells GN Focus. “We currently supply about 40 tonnes per month to the US for the Afghan and Arab populations in the Midwest.”

Samex also wants to export to the UAE. “As we develop the plant and generate greater production, we will be actively seeking trading partners in the UAE and all GCC countries,” Black says, adding that his company will have a big stand promoting camel meat at Gulfood, one of the world’s largest annual trade show for food and beverages, in Dubai in 2013.