UAE’s high-tech food plan pays off in pandemic

An International Center for Biosaline Agriculture (ICBA) scientist advises a farm owner, in the Al Wagan area, near Al-Ain, UAE. (Reuters)
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Updated 27 May 2020

UAE’s high-tech food plan pays off in pandemic

  • Agriculture is becoming possible and profitable in a country with harsh climatic conditions
  • ICBA works with local ministries, farmers’ associations and businesses to introduce climate-resilient crops such as quinoa, pearl millet and sorghum

ABU DHABI: In the past four years, the United Arab Emirates has grown a small but rising share of its own organic tomatoes, aiming to shore up food security in an import-dependent desert country.
The effort — part of a broader push to produce more home-grown food amid fears climate change could trigger instability in the global food trade — started after the country was hit by food export bans during the 2008-2009 financial crisis.
Today, the move to build up food resilience is paying off early in the face of another crisis: the coronavirus pandemic.
When the United Arab Emirates (UAE) went into lockdown in April to contain the spread of the novel coronavirus, residents had the same reaction as millions of others around the world — they started panic-buying.
The instinct to stock up made sense in a country where more than 80% of food is imported, said Ismahane Elouafi, director general of the International Center for Biosaline Agriculture (ICBA).
Nonetheless supermarket shelves have remained fully stocked, partly because the UAE has long had policies in place to ensure an uninterrupted supply of food from abroad, she noted.
But in the face of the pandemic, the UAE’s confidence that it will continue to have enough food is bolstered by its success in growing its own, using innovations like vertical farming and climate-resilient crops, she added.
“Thanks to the work being done to harness the benefits of innovation, agriculture is becoming possible and profitable in a country with harsh climatic conditions,” Elouafi said.
According to data from the World Bank, the contribution of agriculture to the country’s gross domestic product rose from $2.39 billion in 2012 to $3.06 billion in 2018.
The UAE’s Ministry of Food Security declined to respond to a request for comment.
Currently ranking 21 out of 113 countries on the Economist Intelligence Unit’s Global Food Security Index, the UAE aims to be in the top 10 by 2021 and number one by mid-century.
By then, the federal government hopes half the food Emiratis consume will be produced locally, compared to 20% today.
Under the UAE’s National Food Security Strategy — which was officially launched in 2018, but had already been woven into government policy for several years before — the country has worked to boost domestic food production.
It has built infrastructure, including complexes for cattle-breeding — and introduced financial measures, from exempting value-added tax on food produced on local farms to paying subsidies on fodder.
But traditional farming methods can only go so far in a country with limited supplies of fresh water and arable land.
Last year, the World Resources Institute classified the UAE as under “extremely high water stress,” meaning more than 80% of available surface and groundwater supply is withdrawn on average every year.
The bulk of that water is used by the agricultural sector. Combined with a warming climate and a growing population, this is causing available groundwater levels to drop by 0.5 cm (0.2 inches) per year.
To meet the country’s freshwater needs, the government is increasingly turning to energy-intensive desalination methods.
Another challenge is that less than 1% of the UAE’s land is arable, according to the World Bank.
The focus is on finding ways to farm with fewer resources — which is where technology and experimenting with new crops can help, said Sajid Maqsood, associate professor in the College of Food and Agriculture at United Arab Emirates University.
“Urban and vertical farming has to be an important part of the strategy,” he said by phone.
Farming in the UAE has been moving in a high-tech direction over the past decade.
In 2009, for example, the Middle Eastern country had 50 hydroponic farms, where plants are grown without soil using nutrient-infused water. Today, it has more than 1,000, according to the ICBA.
Most of the farming innovations gaining ground in the UAE involve growing crops indoors, in an attempt to tackle one of the main challenges facing the region’s farmers: the climate.
Global warming is expected to lead to less rainfall, fiercer droughts, higher sea levels and more storms in the UAE over the next 70 years, a group of climate experts said in a 2019 paper.
By 2050 the country’s average temperature will increase by about 2.5 degrees Celsius (4.5 degrees Fahrenheit), they noted.
“At least four months of the year are not conducive to traditional agriculture — heat, humidity and dust are challenges to farming in the region,” explained Digant Raj Kapoor, people manager at Madar Farms, a local agriculture tech company.
“It means that yields and quality cannot be controlled or predicted. An indoor facility is able to tackle this by having as much control over growing conditions as possible.”
One project, Pure Harvest Smart Farms, has been producing a share of the UAE’s home-grown tomatoes since it launched in 2016, using the country’s first technology-enabled greenhouse.
With its climate-controlled system developed in the Netherlands, the Emirates-based start-up can grow year-round, producing about 2 metric tons of pesticide-free tomatoes each day on its 1-hectare (2.5-acre) proof-of-concept farm.
Pure Harvest plans to diversify into other fruits and vegetables, expanding to 30 hectares in the next few months.
In recent years, the UAE has also seen a rise in the number of vertical farms, in which crops are grown stacked under LED lighting and watered with mists or drip systems.
In Dubai, the country’s business and tourism hub, airline catering service Emirates Flight Catering and vertical farm operator Crop One Holdings have launched a $40-million joint venture to build the world’s largest vertical farm.
Crop One Holdings says the 130,000 square-foot (12,077 sq m) farm — due to be completed this year — will produce 6,000 pounds (2,721 kg) of pesticide- and herbicide-free fruits and vegetables daily, using 99% less water than traditional farms.
Branching out into new crops is key to the UAE’s quest to become self-sustaining, said the ICBA’s Elouafi.
The Dubai-based ICBA works with local ministries, farmers’ associations and businesses to introduce climate-resilient crops such as quinoa, pearl millet and sorghum to farmers, she added.
“The global food production system is currently dominated by just a few staple crops — this needs to change,” she said.
For Kapoor at Madar Farms, which has been growing leafy greens and microgreens in vertical systems since 2017, the move into tech-enabled agriculture is inevitable to deal with challenges like climate change and the novel coronavirus.
“The world will have to shift toward controlled-environment agriculture,” he said.


Aramco agrees $12.4 billion pipeline deal with EIG

Updated 10 April 2021

Aramco agrees $12.4 billion pipeline deal with EIG

  • Aramco to hold 51% stake in new company
  • Aligns with recently announced "Shareek" program

RIYADH: Aramco has agreed a $12.4 billion leaseback deal with a consortium led by EIG Global Energy Partners in one of the biggest energy infrastructure transactions.
It represents a continuation of Aramco’s strategy to unlock the potential of its asset base and maximize value for its shareholders, it said in a statement.
A newly-formed unit called Aramco Oil Pipelines Company will lease usage rights in Aramco’s stabilized crude oil pipelines network for a 25-year period.
In return, Aramco Oil Pipelines Company will receive a tariff payable by Aramco for the stabilized crude oil that flows through the network, backed by minimum volume commitments.
Aramco will hold a 51 percent majority stake in the new company and the EIG-led consortium will hold a 49 percent stake.
The Saudi oil giant said it would retain full ownership and operational control of its stabilized crude oil pipeline network and that the transaction would not impose any restrictions on Aramco’s actual crude oil production volumes.
“This landmark transaction defines the way forward for our portfolio optimization program,” said Aramco President Amin Nasser. “We are capitalizing on new opportunities that also align strategically with the Kingdom’s recently-launched Shareek program. Aramco’s strong capital structure will be further enhanced with this transaction, which in turn will help maximize returns for our shareholders.”

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Oil prices dip on mixed supply and demand outlook

Updated 10 April 2021

Oil prices dip on mixed supply and demand outlook

  • Downward pressure has been exerted by the decision of OPEC+ to increase supplies by 2 million barrels per day between May and July

LONDON: Oil prices edged lower on Friday on rising supplies from major producers and concerns over a mixed picture on the COVID-19 pandemic’s impact on fuel demand.

Brent crude futures for June fell 37 cents, or 0.59 percent, to $62.83 a barrel while US West Texas Intermediate (WTI) crude for May was at $59.24, down 36 cents.

Both contracts are on track for a 2-3 percent drop this week but still far from a low of $60.47 hit two weeks ago.

Downward pressure has been exerted by the decision of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to increase supplies by 2 million barrels per day between May and July.

Analysts expect global oil inventories to continue to fall, but predict fuel demand will accelerate in the second half of the year as the global economic recovery gathers steam.

“A lot of destocking is going on, so we are well into the rebalancing process,” said Energy Aspects analyst Virendra Chauhan.

Physical markets will still need to pick up before prices and inter-month spreads can rally, he added.

For all the optimism, renewed lockdowns in some parts of the world and problems with vaccination programs could threaten the oil demand picture.

Stephen Innes, chief global markets strategist at Axi, said oil prices are expected to trade in a range between $60 and $70 as investors weigh these factors.

“Oil is currently in a wait-and-see mode, with market participants looking at the vaccination pace to understand when oil demand will recover further and at nuclear talks in Vienna to see when more Iranian barrels might come back,” said UBS commodity analyst Giovanni Staunovo.

Talks to bring Iran and the US fully back into the 2015 nuclear deal are making progress, delegates said on Friday, but Iranian officials indicated disagrement with Washington over which sanctions it must lift.

“If a fulsome framework can be crafted in the coming weeks, significant quantities of Iranian oil will likely hit the market in H2 2021,” RBC Capital analyst Helima Croft said in a note this week.


Pakistan's current $16 billion forex reserves will make import payments ‘easy’ — experts

Updated 10 April 2021

Pakistan's current $16 billion forex reserves will make import payments ‘easy’ — experts

  • The country's foreign currency reserves increased to $22.18 billion after four years, following significant Eurobond inflows
  • The situation has not done much for the national currency that may come under pressure in the long term due to debt servicing

KARACHI: Pakistan's foreign exchange reserves have reached $22.18 billion, with more than $16 billion held by the central bank, after a span of four years, as the country raised $2.5 billion by issuing Eurobonds, said an official statement released on Thursday.

"The State Bank of Pakistan (SBP) has received the proceeds of government's $2.5 billion Eurobond issuance in its account," said the statement circulated on Thursday night. "As a result, SBP's foreign exchange reserves closed above $16 billion, their highest level since July 2017."

According to economic analysts, the inflows have brought the government in a more comfortable position to pay for its imports, including any COVID-19 vaccines.

"The inflow of $2.5 billion has raised the cushion of the State Bank and it will also improve the country's current account position," Dr. Abid Qaiyum Suleri, member of the government's Economic Advisory Council (EAC), told Arab News on Friday.

"The inflows have made it easy for the country to make payments for imports of COVID-19 vaccine, wheat or sugar due to an improved reserves position," he continued. "This is also the right time to tap international market."

Some economists also suggested that Pakistan should utilize the Eurobond proceeds to pay off some of its debts.

"The country has arranged the liquidity to pay off previous external debts because time to make these payments is due and the prices of oil are also increasing with the ease of lockdown," Dr. Vaqar Ahmed, joint executive director at the Sustainable Development Policy Institute (SDPI), said.

"For the payment of external debts and oil imports the Eurobond proceeds can be utilized," he added.

The inflows did not generate any major fluctuations in the currency and interbank markets as the rupee only appreciated 0.05 percent to close at Rs152.94 against the greenback on Friday.

"Going forward the rupee can come under pressure due to debt servicing since the country is availing G20 debt relief at present," Samiullah Tariq, head of research at the Pakistan-Kuwait Investment, told Arab News. "Only strong and enduring inflows can resist the fall of rupee. Otherwise, we expect three to four percent depreciation in the long run."

Despite its limited impact on the national currency, an official statement announced that the country had returned to the international market for the first time by issuing securities since 2017.

"Pakistan has entered the international capital market after a gap of over three years by successfully raising $2.5 billion through a multi-tranche transaction of 5, 10 and 30-year Eurobonds," the finance ministry said on Thursday.

"The transaction generated great interest as leading global investors from Asia, the Middle East, Europe and the US participated in the global investor calls and the order book," it added.

This is for the first time that Pakistan has adopted a program-based approach with registration of Global Medium-Term Note program.

"The program will allow Pakistan to tap the market at short notice," the ministry continued in its statement. "The government intends to make full use of this program and become a regular issuer in the International Capital Markets."


Riyadh city chiefs deny Bloomberg report of unpaid Metro contractor claims

Updated 09 April 2021

Riyadh city chiefs deny Bloomberg report of unpaid Metro contractor claims

  • Pandemic leads to supply chain disruptions
  • All claims go through contractual process

RIYADH: The Royal Commission for Riyadh City (RCRC) has denied claims it has not paid contractors building the city’s multi-billion dollar metro project.
It follows a Bloomberg report published earlier in the week headlined “Saudi Arabia’s Unpaid Tab With Metro Builders Runs Into Billions.”
It said that payments had been made in a timely manner on the project which started in 2013 and that any contractual claims were assessed through a dispute resolution process.
“All claims filed go through a dispute resolution process in order for all disputes to be resolved professionally and amicably,” it said in a statement. “The COVID-19 pandemic affected the construction of mega projects, such as supply chain interruptions. However, despite the outbreak, we have ensured the project’s continuity, as we adapted business behavior and construction processes.”
The Riyadh Transit Network Project (RTNP) aims to support the Kingdom’s 2030 economic diversification agenda by boosting the transportation sector and raising the capital city’s profile.
With its six lines totaling 176km and 85 metro stations, the metro network will cover most of the densely populated areas of the city, public facilities, as well as governmental, educational, commercial and medical institutions.
It will connect to King Khalid International Airport and King Abdullah Financial District, in addition to main universities and the downtown area.
The metro service will also be integrated with the Riyadh Bus network, linking to 3,000 bus stops spread across the city over 1,900 km of routes.


Saudi MoF completes $57.8bn payment orders in first quarter of 2021

Updated 09 April 2021

Saudi MoF completes $57.8bn payment orders in first quarter of 2021

RIYADH: The Ministry of Finance (MoF) finalized the disbursement procedures for all payment orders received from the public and private sector with a total value of SR217 billion ($57.8 billion) in the first quarter of 2021, according to a ministerial tweet.
Expenditure for the public sector amounted to SR186 billion, while the same for the private sector reached SR31 billion, accounting for 99 percent of the total payments’ orders received.
Saudi Finance Minister Mohammed Al-Jadaan said that 24 local companies, the majority of which are listed in the Saudi market, will invest SR2 trillion by 2025, and another SR3 trillion by 2030, Al Arabiya reported.
Al-Jadaan indicated that the Public Investment Fund is a shareholder in most of these companies.