Demand for "healthy" food and organic produce in the UAE

Special Analysis by the Ministry of Agriculture of the export potential of fresh agricultural produce to the UAE
November 3, 2020
Demand for "healthy" food and organic produce in the UAE

Much has already been written and said about the peace agreement with the United Arab Emirates and the potential for trade between the two countries, but the question remains - why Israel? The population in the UAE is different from that in most of the world, with almost 90% of the residents of the UAE (10 million inhabitants) being migrant workers, and a similar percentage living in cities, most of them with high per capita incomes. The UAE is an attractive market for the sale of agricultural produce, since it is an import-based market. Approximately 80% of the agricultural produce consumed in the Emirates is imported from all over the world, with a total value of over $10 billion (in 2018). In addition, the UAE is a global trade and transit center for a variety of goods destined for the Middle East. The United States exported $1.2 billion worth of agricultural produce to the country in 2018, mostly to the retail sector. Agricultural produce is also imported from Jordan and the Palestinian Authority.

Retail sales in the UAE are divided into two main categories: modern commerce and traditional trade. Modern commerce is comprised of organized retail chains, grocery stores, express stores, specialty stores, convenience stores, and online commerce. This category dominates the market, especially in Dubai and Abu Dhabi. Traditional trading includes direct trade services and private grocery stores ("Bakala" in Arabic) that are open on average 18 hours a day, 7 days a week. These stores fulfill the needs of the average household and offer grocery products for everyday use. Traditional trade is more common in the more northern emirates, such as Sharjah, Ajman, Fujairah and Umm al-Qawin, because of the low amount and availability of modern retail stores. Organic and natural products are sold in both modern and traditional markets throughout the UAE, with this being more common in the emirates of Dubai and Abu Dhabi.

Demand for "healthy" food and organic produce in the UAE is in line with these trends seen in the Western world, and it constitutes potential for Israeli exports. About 5 years ago, the government in Dubai began to take steps to raise awareness about health issues and the dangers of obesity. Consequently, there has been a significant increase in demand for health products. Consumption of "natural" products has increased by about 10%, consumption of organic products increased by about 20%, and "free" products (such as free-range eggs) increased by about 15%. This trend is causing a change in the countries exporting goods to the UAE. Thus, exports from Canada and the Netherlands have grown, at the expense of countries such as China and Jordan.

Furthermore, the prices of products imported from Israel to the Emirates are competitive. This is thanks to the geographical proximity between the countries, which may enable land transportation alongside standard air or sea shipping. Therefore, Israel does not need on an aircraft fleet to export its goods to the UAE. Sailing a cruise ship from the port of Ashdod to Dubai takes only about 10-12 days, and the port of Eilat is located about 8-10 days away from Dubai. The duration of the standard overland transport route from Aqaba to Dubai is about 32 hours.

Yaakov Poleg, Senior Vice President for International Trade and Cooperation at the Ministry of Agriculture: "Israeli products are known around the world for their quality, and are characterized primarily as appealing to markets that are willing to pay for the high quality of these products. The Ministry of Agriculture and Rural Development was among the first ministries to initiate official contacts with the Ministry of Food Security in order to explore additional ways to deepen economic ties in general, and expand fresh produce exports from Israel to the UAE in particular. Dialogue is already under way regarding issues of common interest in the field of agricultural production in desert conditions. In this context, I should note there are discussions in progress between the private sector in both countries. In addition, an official delegation accompanied by business people is expected to visit soon. The potential is vast, and the Ministry of Agriculture intends to play an inclusive and guiding role."

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