In July last year, the United Arab Emirates’ National Meteorological Center released a video showing artificial rain, in Dubai, caused by a “cloud seeding” drone technology. The objective is to alleviate the heat that can reach up to 50 ºC (120 ºF) in the region. That is the result of years of research and many millions of dollars, and the image went viral on social media.
Low levels of rainfall are a problem that affects several countries in the Middle East and has a direct impact on the region’s agricultural production capacity. The average annual rainfall in the UAE is around 100 millimeters; as a comparison, in Brazil, this number is close to 1,800 millimeters. In addition to that, there is limited availability of arable land and desert climate, meaning several countries in the region depend on food imports to guarantee domestic supplies. The UAE imports 80% of the food they consume, and Qatar, 83%.
This external dependence makes food security a critical issue for countries in the Middle East. Local governments have medium and long-term strategies to ensure that there are no shortages. Being aware that even if local production increases imports will remain an essential source of supply, there is a general effort to strengthen the region’s supply chain.
At the heart of the UAE’s Food Security Strategy, for example, is the facilitation of global agricultural trade and the diversification of supplier countries. The country’s goal is to reach by 2051 the first position in the Global Food Security Index. Currently, they occupy 31st place.
At the beginning of the COVID-19 pandemic, several countries imposed restrictions on food exports, fearing domestic shortages. Supply chains have been put to the test (and still are). Facing that adverse scenario, Brazil proved to be a reliable supplier and not only maintained but also expanded its foreign sales of agricultural products.
For countries that are heavily dependent on food imports, establishing a reliable and resilient supply network is high on the priority list.
It is a fair concern, and it becomes even more relevant when considering population growth in countries. Between 2000 and 2020, the number of inhabitants in the Middle East grew by more than 50%; in the UAE, the increase was over 200%, a leap from 3.1 million to 9.9 million people; considering the same period, the population of the European Union increased by 4%, and that of Brazil, by 22%.
Since their local production is extremely restricted, there are opportunities for several sectors. In 2019, for example, all rice consumed in Saudi Arabia was imported. In the case of lemons, the volume purchased externally was more than double that produced locally. For beef, the amount imported was more than triple that produced in the country.
As Brazil is the third-largest food exporter in the world, this scenario presents as an opportunity for companies that already export and for those wishing to enter the international market.
We are currently the second-largest food supplier to the Middle East, right after India. Last year, we exported around US$ 7.2 billion in agricultural products to the region, on a very concentrated agenda, with chicken meat, cane sugar, and corn responsible for almost 60% of everything we sold.
Brazilian agribusiness has much more to offer. Brazil has a highly diversified agricultural production and can expand its participation in the Middle East.
Believing in this potential, the Brazilian Confederation of Agriculture and Livestock (CNA) chose Dubai to host its third international office – in 2021, offices in Shanghai and Singapore were opened.
Through this initiative, CNA intends to promote and facilitate the access of small and medium rural entrepreneurs to the region, providing local intelligence and customized support.
Having a local support network speeds up entry and consolidation in foreign trade.
The total of Brazilian companies that export is very low; one of the reasons is the size of our domestic market. Also, participating in foreign trade is a costly and time-consuming process. It should be seen as a long-term investment. And as such, the more support and qualified information exporters have, the more assertively they will act.
In this article, for example, the phrase “Middle East” is used as if it were a single market, when in fact we are dealing with 14 countries: Saudi Arabia, Bahrain, Qatar, Kuwait, the UAE, Yemen, Iran, Iraq, Israel, Jordan, Lebanon, Oman, Palestine, and Syria.
It is essential to define target markets and develop a specific internationalization strategy.
Opportunities exist in every country for companies that can establish themselves as reliable suppliers and can adapt to local requirements.
Sueme Mori is the Commercial Intelligence Coordinator at the Brazilian Confederation of Agriculture and Livestock (CNA)