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Australian agricultural exports demand soar in UAE

market vegetablesDemand for Australian agricultural products is expected to rise in United Arab Emirates (UAE), according to the business information researchers from IBISWorld.

Due to the region’s arid land and climate, some of the food must be sourced from other countries and the liberalised trade laws in the UAE have helped them become a hub for re-exports to the rest of the region, which includes Bahrain, Kuwait, Oman and Saudi Arabia.

“Exporters who can target this expanding market have great opportunities to increase trade ties and reduce trade barriers,” explained IBISWorld senior industry analyst, Sam Johnson.

“Demand is surging for Australian meat, horticultural goods, sugar and grain crops among many of these countries – with the value of Australian meat product exports alone to these six key markets expected to grow at an annualised 17.7% over the five years through 2016-17, reaching over $1 billion.”

The value of Australian fresh, dried and frozen vegetable and fruit exports to the UAE is expected to rise at an annualised 15.2% over the same period. In May 2017, the UAE and Australia announced that non-tariff barriers would ease for chilled beef and lamb exports, extending the maximum allowable shelf life of these products.

“This will likely reduce transport costs associated with exporting premium chilled meat to these markets, benefiting local exporters,” added Johnson.

Meat product exports to Saudi Arabia are also expected to grow over the same period. Beef exports have largely driven this growth, with sheep meat products also contributing to a lesser degree.

Similarly, the value of grain exports to Bahrain, largely driven by wheat, are forecast to skyrocket over the five years through 2016-17. Meat, vegetables and fruit exports have increased most consistently across the Gulf States.

However, competition to access these growing markets is strong among other agricultural export regions, such as the European Union, the United States and China. Nonetheless, local exporters that can access this growing market stand to benefit from rising demand.

“While agricultural exports to other countries and regions have also grown over the past five years – particularly to the United States and East Asian countries – these markets are already larger and more established export destinations for Australia’s agriculture industries,” said Johnson.

“Additionally, concerns surrounding protectionist sentiment in the United States following its exit from the Trans-Pacific Partnership Agreement could hamper future demand growth from that market.

“Australia’s relative lack of market penetration of the emerging Gulf States presents an opportunity for greater export growth from these markets over the next five years.”

However, the current political difficulties in the region, with Saudi Arabia and United Arab Emirates suspending trade with Qatar, could limit the ability of domestic exporters to expand in Qatar. Particularly as the United Arab Emirates is a hub for re-exports to Gulf States, such as Qatar.

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