Agriculture market report in the mena region

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Transcript of Agriculture market report in the mena region

  • AGRICULTURE MARKET REPORT IN THE MENA REGION

    2016

    ForProduced by

  • TABLE OF CONTENTS PAGE NO.

    1 INTRODUCTION 3

    2 MARKET OVERVIEW 5

    2.1 MARKET CHALLENGES, DRIVERS AND RESTRAINTS 5

    2.2 MARKET SIZE 6

    3 GROWTH POTENTIAL 8

    4 TRADE OVERVIEW 9

    4.1 TRADING CONDITIONS IN THE MENA REGION 9

    4.1.1 IMPORTS 10

    4.2 KEY PLAYERS IN THE MENA REGION 17

    5 GOVERNMENT POLICIES 18

    6 REGIONAL TRENDS AND INSIGHT 19

    7 SWOT ANALYSIS 21

    8 OUTLOOK 22

    AGRICULTURE MARKET REPORT IN THE MENA REGION | 2016 2

    AGRICULTURE MARKET IN THE MENA REGION

  • 1. INTRODUCTION

    Agriculture plays an important role in the economies of most countries in the MENA region. The contribution of the agricultural sector to the overall economy quite varies within the countries in the region.

    Despite the violence and political instability in the MENA region, it accounts for a significant and growing portion from the total worldwide agricultural production.

    In the next 10 years, the consumption of agricultural products will increase which will also stretch the local production in MENA region. This might lead to high imports that necessitates, respective of the government to have regulations controlling the consumption and production of agricultural products, and rethink their development models, along with initiating economic and social reforms.

    The report focuses on the agriculture sector in the MENA region. The regional classification of MENA is based on the following countries:

    Algeria, Bahrain, Egypt, Iraq, Iran, Israel, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, South Sudan, Sudan, Syria, Tunisia, Turkey, United Arab Emirates, Yemen

    :Source: USDA, Economic Research Service

    FIGURE 1: MENA COUNTRIES MAP

    AGRICULTURE MARKET REPORT IN THE MENA REGION | 2016 3

    AGRICULTURE MARKET IN THE MENA REGION

  • AGRICULTURE MARKET REPORT IN THE MENA REGION | 2016 4

    1. INTRODUCTION

    In the MENA region, some farming systems contain a higher percentage of agricultural population and occupy a low percentage of land area, resulting in high population densities. Others have a low percentage of agricultural population and occupy a high percentage of land area that is characterized by low population densities.

    The table below lists major farming systems in the MENA region:

    TABLE 1: MAJOR FARMING SYSTEMS OF MENA

    FARMING SYSTEMS LAND AREA (% OF REGION) AGRIC. POPULATION (% OF REGION) PRINCIPAL LIVELIHOODS Irrigated 2 17 Fruits, vegetables, cash crops

    Highland Mixed 7 30 Cereals, legumes, sheep, off-farm work

    Rain fed Mixed 2 18 Tree crops, cereals, legumes, off-farm work

    Dry land Mixed 4 14 Cereals, sheep, off-farm work

    Pastoral 23 9 Sheep, goats, barley, off-farm work

    Sparse (Arid) 62 5 Camels, sheep, off-farm work

    Coastal Artisanal Fishing 1 1 Fishing, off-farm work

    Urban Based

  • AGRICULTURE MARKET REPORT IN THE MENA REGION | 2016 5

    2. MARKET OVERVIEW

    2.1 MARKET CHALLENGES, DRIVERS AND RESTRAINTS

    Agricultural productivity growth is imperative because it is an essential source of overall growth in an economy. However, the industry is characterized by many challenges, restraints and drivers controlling its growth.

    A rapidly changing global environment and mounting domestic challenges are pushing many Middle East and North African (MENA) countries to rethink their development models which will require a study on market drivers, restraints and challenges

    The figures illustrated below analyze the agriculture market in the MENA region and provide an overview of the key drivers and restraints that will impact the current and future market scenario. In addition to the challenges facing agricultural market, one of the biggest challenges is that of water management as the region faces an acute scarcity of water, and is likely to witness quick growth for water demand, affected by climate change. The region is also plagued by weak institutions and poor water governance.

    Moreover, the food security remains a key challenge for governments in the MENA region, which is heavily dependent on food imports. While the overall agricultural productivity for the region increased significantly during the 1990s due to modernization efforts with water management, the region is still expected to face a food deficit of 50-90 million tons by 2020. Among the agricultural products, the region is most dependent on grain import: which represent 56% of the total consumption (compared to 13% for S-Africa and 6% for Asia)

    FIGURE 2: MARKET CHALLENGES

    KEY CHALLENGES

    WATER MANAGEMENT CHALLENGES

    FOOD SECURITY

    COMPETITION BETWEEN SECTORS

    FIGURE 3: MARKET DRIVERS AND RESTRAINTS

    MARKET RESTRAINTS MARKET DRIVERS

    SIGNIFICANT EXPORTERS

    POLITICAL SITUATION

    EXPORT RESTRICTIONS

    BREACHES OF SUBSIDYCOMMITMENTS

    HIGH VULNERABILITY TO NATURAL DISASTERS AND CLIMATE CHANGE

    INCREASING DEMAND EXPORT FOR CROPS, INCLUDING FRUITS, VEGETABLES, CEREALS, AND SUGAR

    LARGE SCALE IRRIGATION IS EXPANDING: ENABLING INTENSIVE PRODUCTION OF HIGH VALUE CASH

    AGRICULTURE MARKET IN THE MENA REGION

  • AGRICULTURE MARKET REPORT IN THE MENA REGION | 2016 6

    2. MARKET OVERVIEW

    2.2 MARKET SIZE

    Globally the MENA region accounts for a growing portion of the worldwide agricultural species imports. Despite political uncertainty, the regions growing population and rising incomes are driving higher demand for major agricultural species.

    Egypt is the 14th biggest rice producer in the world and the 8th biggest cotton producer in the world.

    Although the Kingdom of Saudi Arabia is widely thought of as a desert, it has regions where the climate has favored agriculture. By implementing major irrigations projects and adopting large scale mechanization, Saudi Arabia has made immense progress in developing its agricultural sector.

    Regardless of the fact that the region faces water-scarcity, many countries across the region, especially those around the Mediterranean Sea, are highly dependent on agriculture. For example, the Oum Er Rbia River basin contains half of Moroccos public irrigated agriculture and produces 60 percent of its sugar beets, 40 percent of its olives, and 40 percent of its milk.

    The economy of Tunisia gets its central output from agriculture. Tunisia is one of the worlds biggest producers and exporters of olive oil and it exports dates and citrus fruits that are grown mostly in the northern parts of the country.

    In Lebanon, agriculture is the third most important sector after the tertiary and industrial sector. It contributes nearly 7 percent to the countrys GDP and employs around 15 percent of the active population. Main crops are cereals (mainly wheat and barley), fruits and vegetables, olives, grapes, and tobacco.

    In the MENA region, wheat, corn, soybeans, cotton, rice, and poultry, are analyzed to be the most significant products in the agricultural sector.

    Additionally, countries such as Algeria, Egypt, Morocco, Tunisian, etc, agriculture play an important role in the overall GDP contribution.

    AGRICULTURE MARKET IN THE MENA REGION

  • AGRICULTURE MARKET REPORT IN THE MENA REGION | 2016 7

    2. MARKET OVERVIEW

    2.2 MARKET SIZE FIGURE 4: MENA SHARE OF WORLD IMPORTS (PERCENT)

    0

    20

    40

    60

    80

    100

    Soybeans Corn Soymeal Cotton Rice PoultryWheat

    138.3mmt

    103.0mmt

    91.5mmt

    57.0mmt

    46.7mmt

    39.1mmt

    7.4mmt

    Source: USDA Economic Research Service (2015)

    TABLE 2: AGRICULTURE CONTRIBUTION FROM TOTAL DP IN KEY MENA COUNTRIES

    As a reference point, total world import volumes in millions of metric tons (mmt) are shown on each commoditys bar graph

    COUNTRY NAME 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

    Algeria 9.77 10.32 9.90 8.01 7.75 7.69 6.68 10.07 9.03 8.62 9.40 10.65 11.09

    Egypt, Arab Rep. 16.46 16.34 15.18 14.88 14.07 14.07 13.22 13.63 13.99 14.52 11.14 10.99 11.09

    Lebanon 6.67 6.58 4.33 3.96 4.82 5.35 4.84 4.43 4.29 4.13 6.12 7.18 5.54

    Morocco 16.54 17.29 16.32 14.68 16.89 12.20 13.30 14.68 14.44 14.25 13.37 14.75 12.95

    Tunisia 9.33 10.38 11.01 10.10 10.17 9.40 8.45 9.06 8.20 9.10 9.39 8.83 8.82

    Iran, Islamic Rep. 7.90 7.54 7.19 6.62 7.22 7.39 6.39 7.34 6.86 5.88 7.88 9.03 9.34

    Source: World Data Bank

    AGRICULTURE MARKET IN THE MENA REGION

  • AGRICULTURE MARKET REPORT IN THE MENA REGION | 2016 8

    Source: World Data Bank

    3. GROWTH POTENTIAL

    The MENA region is economically varied, including the oil-rich states of the Persian Gulf as well as the relatively resource-scarce countries such as Egypt, Morocco, and Yemen. The regions population was estimated to be 500 million as of 2014, and has grown at an average of 2.1 percent annually from 2004 to 2013, faster than the world average of 1.2 percent per year and one of the fastest rates in the world.

    Source: World Bank 2014

    The regions income is rising, reaching a per capita average of over $7,600 in 2013, and over the past 10 years, with an annual growth of 2.6%. But this average growth rate conceals major variation within the region. In 2013, the United Arab Emirates reported the highest per capita income at $59,885, while the lowest was in Yemen, at $1,135. In 2013, the regions total GDP accounted for about 5.2 percent of the worlds economy.

    Source: USDA United States Department of Agriculture Economic Research Service

    Unemployment in the MENA region remains a problem with the growing population and limited economic diversification. Like