KARACHI: Pakistan's ongoing economic crisis, caused by a major dollar liquidity crunch, has doubled the cost of Saudi dates, said local traders on Tuesday, after the country lost much of its own crops in the wake of the monsoon floods that destroyed farmlands in the southern region of Sindh and Balochistan last year.
Saudi dates are a much-loved culinary treasure for Pakistani elites in the Muslim fasting month of Ramadan. Traditionally, the prices of these dates remain high in the local market due to their quality. They are also the top choice of affluent classes in Pakistan.
Ajwa, Ambar, Safwai, Sukkari, Barhi, Saghai, Kalmi, Khudri, Kholas and Medjoul are the most famous Saudi dates sold in Pakistan. However, local traders say the prices of Saudi dates had doubled while the sales had reduced this year.
“Last year, the rate of Sukkari dates was Rs1,100 per kilogram,” Sher Zaman Khan, a local dealer, told Arab News on Tuesday. “This year, it rate has increased to Rs2,200. The rate of Kalmi dates stood at Rs900 but it has gone up between Rs1,700 and Rs1,800. Last year, the cost of Ambar date were Rs1,400 but they are sold for Rs2,800 this year.”
With an annual production of around 1.1 million tons, Saudi Arabia is one of the top producers and exporters of dates. Pakistan, which is also among the world's top 10 date producers with about 500,000 tons of annual yield, meets half of its demand through imports, mainly in the holy month of Ramadan.
Dealers said the quantity of Saudi dates had substantially declined in Pakistani market due to restrictions on imports, coupled with the widespread devastation caused by last year's floods in the dates growing areas of Sindh and Balochistan.
“The demand for Saudi dates has declined because of the diminishing purchasing power of people,” Hanif Baloch, an importer and dealer of the fruit, told Arab News. “Even those belonging to high income classes have started thinking before buying.”
Another importer, Haji Abubaker, who used to travel to Saudi Arabia to personally pick up Arabian dates right from the farms in the kingdom, said he could not import dates this year due to government-imposed restrictions.
Pakistan decided to restrict its imports in recent months to prevent the outflow of dollars by slowing down cargo clearance from ports. The banks operating in the country also started delaying or denying opening letters of credit (LCs).
“We were expecting that there would be a shortage of dates during Ramadan after the domestic crop loss and lack of LCs, but this was compensated by the high prices which subdued the demand,” Muhammad Sabir, chairman of Khajoor Market Association, said.
Pakistani farmers said last year's devastating rains had left nothing of the domestically produced dates for Ramadan consumption.
“In Sindh, dates are cultivated on 105,000 acres of land, of which the fruit was ready at 98,000 acres,” Nabi Bux Sathio, senior vice president of the Sindh Chamber of Agriculture, told Arab News. “The fruit was manually picked up and placed on the ground to dry, but rains ruined it, leaving nothing for this Ramadan.”
Despite the reduced sales and production cuts, Pakistanis will still be able to taste Saudi dates after the kingdom presented 100 tons of its produce to the South Asian country.
The Saudi envoy to Pakistan, Nawaf bin Said Al-Malki, and the director of King Salman Humanitarian Aid and Relief Center, Dr Khalid M. Al-Othmani, handed over the fruit to Pakistan for distribution in the country.
PIF’s joint venture with Ma’aden to help establish mining sector: top official
There is ‘as much as $1.3 trillion in untapped resources sitting under the ground in the country’
Updated 03 June 2023
Reina Takla Nirmal Narayanan
RIYADH: With metals and mining being identified as one of the 13 strategic sectors to focus on to achieve the goals outlined in Vision 2030, the Kingdom’s sovereign wealth fund’s joint venture with Saudi Arabian Mining Co., also known as Ma’aden, will help unlock the potential of the mineral wealth in the nation, a top official said.
In an interview with Arab News, Mohammed Aldawood, head of industrials and mining sector for Middle East and North Africa investments at the Public Investment Fund, said that the joint venture will help to establish the mining sector as the third pillar of the Kingdom’s economy, along with providing an opportunity to explore new territories.
“We (PIF) plan to support the growth of mining as a key enabler of this mission to help establish the industry as the third pillar of the economy. Saudi Arabia is fortunate to be endowed with healthy mineral reserves that are currently underexplored. We estimate that there is as much as $1.3 trillion in untapped resources sitting under the ground in the country,” said Aldawood.
He added: “This is a really exciting development that is going to give the PIF and Ma’aden an extensive international footprint in the mining space. It’s going to give the partners a platform to access minerals not available in Saudi Arabia and gives us an opportunity to move into new geographical territories.”
It was in January that Ma’aden and the PIF agreed to form a joint venture to invest in mining assets globally.
Ma’aden will own 51 percent of the venture while the PIF will own 49 percent.
The new venture’s strategy will initially focus on investing in iron ore, copper, nickel and lithium as a non-operating partner taking minority equity positions.
Mohammed Aldawood, Head of industrials and mining sector for Middle East and North Africa investments at PIF
Aldawood said that the new venture’s strategy “will initially focus on investing in iron ore, copper, nickel and lithium as a non-operating partner taking minority equity positions.”
“When we commence the partnership, the company’s paid-up capital will amount to $50 million and we will review that as operations grow. We have agreed if additional funding is required, both PIF and Ma’aden will fund the new company up to $3.12 billion,” he added.
Rising demand for critical minerals
Aldawood also talked about the growing electric vehicle market segment where the demand for critical minerals is growing, amid insufficient investments globally by mining firms.
Citing consultancy firm Wood Mackenzie, Aldawood said that mining companies will need to invest nearly $1.7 trillion over the next decade to accelerate the shift to a low-carbon world.
The PIF official further said that the fund will work with large mining companies and trading houses in developing projects to address the acute shortage of future minerals as the world undergoes an energy transition where demand for critical minerals will rise sky-high.
“Through our JV with Ma’aden and our combined skills sets and knowledge of the industry, I am confident that we will play a role in the critical minerals supply response for the EV value chain. We’ll work with large mining companies and trading houses in developing projects that address an expected acute shortage in future minerals and ensure that Saudi Arabia retains a leading position,” Aldawood added.
• The official discussed the growing electric vehicle market segment where the demand for critical minerals is growing, amid insufficient investments globally by mining firms.
• Citing consultancy firm Wood Mackenzie, he said that mining companies will need to invest nearly $1.7 trillion over the next decade to accelerate the shift to a low-carbon world.
• The PIF official said the fund will work with large mining companies and trading houses in developing projects to address the acute shortage of future minerals.
According to Aldawood, the PIF is committed to bringing core mining projects to life, supplying the world with critical minerals, and helping to meet decarbonization targets at the same time.
“The PIF has all the right attributes to be successful in this journey. We have access to capital and the appetite to invest globally and across the life cycle of an asset,” he said.
JV with Baosteel and Saudi Aramco
In May, the PIF, Saudi Arabian Oil Co. and China-based Baoshan Iron & Steel Co. signed a shareholders’ agreement to establish an integrated steel plate manufacturing complex in the Kingdom.
Aldawood said that this new facility will be the first of its kind in the Gulf Cooperation Council region, and will help advance the regional steel industry ecosystem.
“The project aims to enhance the domestic manufacturing sector through localizing the production of heavy steel plates, transferring knowledge and creating additional export opportunities. It’s a significant investment and a vital development for the industry,” Aldawood noted.
This JV complex is expected to be located in Ras Al-Khair Industrial City, and the facility would have a steel plate production capacity of up to 1.5 million tons per year.
According to Aldawood, this investment decision has been made to significantly reduce the reliance on imported steel and to serve more customers in several strategic industrial sectors including pipelines, shipbuilding, rig manufacturing, offshore platform fabrication plus tank and pressure vessel manufacturing.
“As with our investment in the mining sector, the investment aligns with the PIF’s strategy to unlock the capabilities of promising sectors and strategically important industries that can drive diversification of the local economy,” Aldawood concluded.
DUBAI: Shared mobility is gradually gaining a foothold in the Gulf Cooperation Council region as the automobile industry predictably joins other sectors in adapting to the sharing economy.
Whether it is renting out office space, an Airbnb vacation home, or a fancy dress for a special occasion, more people around the world are embracing the concept of sharing resources and services as opposed to owning them.
Companies are also changing their business models by leveraging the ongoing shift to a sharing economy and the transport sector is no exception.
In fact, the number of users in the car-sharing segment worldwide is likely to grow to 62.11 million by 2027, according to a report issued by Germany-based data-gathering platform Statista.
In the GCC, companies such as Udrive and ekar have dominated the car-sharing space providing customers with an alternative to the existing rental options in cities such as Dubai, Abu Dhabi, and Riyadh.
“There’s a lot of demand for the product,” said Nicholas Watson, the co-founder, and CEO of Udrive, a car-sharing provider in the region.
“The methodology or business model that car-sharing represents, is a fully digital experience with no human interaction. And through that, you streamline access to the vehicles,” which can then be parked anywhere in the city, he said.
With a fleet of 1,000 cars in the UAE mainly Abu Dhabi, Dubai, and Sharjah, Udrive charges customers 1-2 dirhams ($0.27-$0.54) per minute with several options for daily rates.
The car-sharing platform recently launched its operations in the Saudi capital Riyadh with plans to expand its fleet to 1,000 cars by the end of 2023.
It also plans to launch a 1,000-strong fleet of electric vehicles in the next 18 months in Dubai but have similar plans for the Kingdom in near future.
The car-sharing option will also help mitigate the effects of climate change as according to a World Bank report the transportation sector is a major source of emissions accounting for close to 20 percent of the world’s total greenhouse gas emissions.
European statistics show that every car shared removes 17 vehicles off the road, said Udrive CEO.
“That’s where sustainability comes in with car-sharing, we are fractionalizing car rental itself and we are making it available to everybody by the minute,” Watson added.
Reports show that an average passenger car sits idle for 22.5 hours per day. “The key is that the more people become aware that you can rent a car through your mobile phone, open the car through your mobile phone, and drive wherever you want, and end the trip wherever you want,” he told Arab News.
Unlike rental companies, car-sharing covers all costs for petrol, parking, and insurance without requiring customers to put down any deposit amount or worry about minor damage.
In case of an accident, customers must obtain and submit a police report, as per the law, with all damages covered under comprehensive insurance.
“It removes all the barriers of entry for people who normally wouldn’t be able to rent a car,” many of which fall in the middle to lower-income bracket, also considered the largest mobile and working population, said Watson.
Reports by Statista show the car-sharing segment in Saudi Arabia is projected to grow by 7.54 percent in the next five years with the market volume expected to reach $148.60 million in 2027.
In the UAE, the segment is projected to grow by 5.6 percent during the same period with the market volume likely to hit $102.60 million in 2027.
“When you look at these cities, it’s more about population density and the distances (covered) in average travel,” said Watson.
For example, Dubai is a city with horizontal highways such as Emirates Road and Sheikh Zayed Road, which extend from one end of the emirate to the other.
It consists of areas with huge vertical infrastructures and a high density of people per 100 sq. meters looking to move from one area to another.
This makes Dubai an ideal place for car-sharing, says Watson, whereas Abu Dhabi follows a grid-based system resulting in less congested areas.
“Car-sharing is indeed gaining significant momentum in the Middle East,” said Vilhelm Hedberg, founder of ekar, a self-drive mobility platform.
He pointed to a twofold year-on-year increase in user registrations and usage over the last three years on the platform.
According to him, the shift in consumer behavior is due to several factors, including a higher demand for environmentally friendly urban mobility options, which are affordable, convenient, and flexible at the same time.
• More people around the world are embracing the concept of sharing resources and services as opposed to owning them.
• Companies are changing their business models by leveraging the ongoing shift to a sharing economy and the transport sector is no exception.
• The number of users in the car-sharing segment worldwide is likely to grow to 62.11 million by 2027, according to a report issued by data-gathering platform Statista.
“The prices for chauffeur-driven alternatives have increased, making car-sharing a more attractive and cost-effective option,” said Hedberg
He believes, the increase in the adoption of car-sharing services is partly due to the COVID-19 pandemic, which prompted a shift away from public transportation.
“We have also observed a trend where individuals are moving away from traditional car ownership, and instead are opting for longer-term rentals to meet their mobility needs,” he said.
In response to this demand, ekar has recently introduced subscription leasing, offering flexible rental options ranging from 1 to 9 months with a door delivery service.
Similarly, Soham Shah, CEO of Selfdrive.ae, a car rental and monthly subscription platform, believes there is a growing acceptance of car subscription programs, particularly among expatriates residing in the Gulf countries.
According to him, subscription services are especially attractive to individuals who seek a personalized mobility experience but are unable to purchase a car immediately upon arrival in the country.
“Whether they are in the process of settling down or are aware of a certain timeframe before making a buying decision, they require monthly mobility solutions,” he said.
“The majority of clients in this region are expatriates, who typically prefer vehicle subscriptions over simply sharing a car from point A to point B,” Shah added.
He also described the GCC taxi market as “well-established, highly regulated and maintained,” pointing out that there is a strong inclination toward using local taxis or opting for services like Uber that offer car-sharing.
However, Shah believes the future of mobility in the GCC lies in a sustained ecosystem of on-demand mobility that provides a car-ownership experience without the need for purchasing a car.
The subtle shift in the automobile industry coincides with the region’s increased attention toward combating climate change and its unified vision to create smarter, greener transportation systems.
By providing individuals with convenient access to transportation without the need for private vehicle ownership, car-sharing promotes a shift toward “a more sustainable and environmentally conscious lifestyle,” said Hedberg.
There is no doubt that sharing mobility offers more efficient utilization of vehicles, reducing the number of cars on the road, he added.
Dubai’s YallaHub gears up to expand presence in Saudi Arabia
The company has set its strategy on Gulf expansion with Saudi Arabia being the primary market: CEO
Updated 03 June 2023
CAIRO: Seeking to explore the immense growth opportunities in Saudi Arabia, Dubai-based e-commerce facilitator YallaHub launched a full-throttle expansion plan to enter the Kingdom’s burgeoning market by the second quarter of 2023.
Founded at the end of 2022, YallaHub is a marketplace aggregator and digital distributor that enables brands to scale their e-commerce businesses on a regional and global level.
In an interview with Arab News, Leo Dovbenko, CEO and co-founder of YallaHub, said that the company has set its strategy on Gulf expansion with Saudi Arabia being the primary market.
“Saudi Arabia’s expansion presents a significant growth opportunity for YallaHub. By entering the Kingdom, YallaHub will tap into its large consumer base, leverage the country’s favorable economic conditions, utilize well-developed infrastructure, and establish strategic partnerships,” Dovbenko said.
The CEO announced that YallaHub, with its ambitious objectives, has initiated its expansion process and is set to officially commence operations in Saudi Arabia by mid-summer 2023.
YallaHub reaffirmed its commitment to the Saudi market, by setting ambitious objectives to position the Kingdom at the epicenter of innovation.
“First and foremost, we’re dedicated to helping ‘Made in Saudi’ brands gain worldwide recognition, fostering their growth, and expanding their reach across new markets,” Dovbenko said.
He also highlighted that YallaHub’s support has the potential to help over a million small and medium enterprises escalate their presence regionally and globally.
“Secondly, women are the majority of our clients, wanting to start a simple online business. We are developing educational support to help them,” he said.
“We are committed to empowering female entrepreneurs in the Kingdom, unleashing their potential in the realm of e-commerce. Our all-in-one solution offers a seamless and comfortable platform for boosting e-commerce sales, encouraging women to confidently navigate the digital landscape and achieve success,” Dovbenko added.
YallaHub aims to foster Saudi’s e-commerce growth by offering a comprehensive solution to significantly aid SMEs.
“YallaHub supports the government’s Vision 2030 agenda of increasing the number of SMEs, expanding the geographical coverage of e-commerce delivery beyond the Kingdom’s major cities, and creating a thriving entrepreneurial ecosystem in Saudi Arabia,” Dovbenko said.
He further added that the company’s mission aligns perfectly with Vision 2030’s goal to encourage more women to enter the business world. “YallaHub’s solutions will allow SMEs to scale up operations across the Middle East and North Africa markets and expand globally through various sales channels simultaneously. This, in turn, can lead to overall growth in the Kingdom’s e-commerce sector, increase exports and create a more thriving entrepreneurial ecosystem,” Dovbenko explained.
“Our ultimate goal is to eliminate boundaries for ambitious entrepreneurs who produce innovative products, allowing them to reach new markets without limits,” he added.
By entering the Kingdom, YallaHub will tap into its large consumer base, leverage the country’s favorable economic conditions, utilize well-developed infrastructure, and establish strategic partnerships.
Leo Dovbenko, CEO and co-founder of YallaHub
Dovbenko highlighted that YallaHub’s principal mission is to address the hurdles encountered by businesses during online expansion. He stated that the company is dedicated to eliminating “any obstacles” to regional growth.
With one foot already in the market, YallaHub has sealed five agreements with brands seeking expansion outside the Kingdom, while onboarding 30 brands aspiring to penetrate the Saudi market.
“YallaHub is in partnership negotiations with the Ministry of Investment, the Ministry of Commerce, and the Small and Medium Enterprises General Authority, also known as Monsha’at,” Dovbenko added.
The company is currently opening a local office in Riyadh and is looking to hire an on-ground team.
“We see many companies that want to expand out of the Kingdom and companies who want to enter this market. Our Saudi office will work in both directions, and this will help us to grow faster,” he added.
YallaHub offers an extensive array of products designed to dismantle any scalability hurdles facing e-commerce businesses.
The company offers registration and licensing services, export and import assistance, storage and fulfilment, super-fast delivery, marketing, e-commerce setup and payment gateway rent.
YallaHub’s primary target market comprises countries in the Gulf Cooperation Council which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.
• The company offers registration and licensing services, export and import assistance, storage and fulfillment, super-fast delivery, marketing, e-commerce setup and payment gateway rent.
• YallaHub’s primary target market comprises countries in the GCC which include Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, and the UAE.
• Dovbenko elaborated on YallaHub’s strategy to harness the GCC market’s strong purchasing power, favorable economic climate, financial resilience, affordable labor and delivery expenses, urbanized populace and tech-inclined youth.
Dovbenko elaborated on YallaHub’s strategy to harness the GCC market’s strong purchasing power, favorable economic climate, financial resilience, affordable labor and delivery expenses, urbanized populace and tech-inclined youth.
By the end of 2023, the startup aims to attract over 100 brands from all markets and reach $10 million in annual recurring revenue.
“Since its launch in late 2022, YallaHub has introduced over 45 brands into the UAE market including cosmetics and perfumery, personal care, beauty goods and accessories, food and beverage, dietary supplements, home care, small electronic devices, pet products and others,” Dovbenko added.
He also revealed that YallaHub’s grand plan includes expanding across the entire GCC region by 2025. The expansion for this year encompasses the UAE, Saudi Arabia and Qatar, while Oman, Kuwait and Bahrain are on the company’s radar for 2025.
Dovbenko, a seasoned entrepreneur, had previously co-launched YallaMarket, an online grocery marketplace, prior to YallaHub. His earlier venture managed to attract $12 million in funding from regional investors.
He shared that YallaHub intends to secure $5 million in a series A funding round this summer.
Oil markets may have been oversold in the last two trading days, says analyst
Updated 01 June 2023
RIYADH: Oil steadied on Thursday as a potential pause in US interest rate hikes and the passing of a crucial vote on the US debt ceiling bill were offset by a report of rising inventories in the world’s biggest oil consumer.
US Federal Reserve officials on Wednesday suggested interest rates could be kept on hold this month and the US House of Representatives passed a bill suspending the government’s debt ceiling, improving the chance of averting a disastrous default.
Brent crude futures fell 10 cents, or 0.14 percent, to $72.50 a barrel by 1339 GMT while US West Texas Intermediate crude rose 7 cents, or 0.1 percent, to $68.16. Both benchmarks fell on Tuesday and Wednesday.
“Oil markets may have been oversold in the last two trading days,” said CMC Markets analyst Tina Teng. “Sentiment rebounded amid the debt bill’s passage in the House and (the) Fed’s rate hike pause signal.”
• Market sources citing American Petroleum Institute figures on Wednesday said that US crude inventories rose by about 5.2 million barrels last week.
• Brent crude futures fell 10 cents, or 0.14 percent, to $72.50 a barrel by 1339 GMT while US West Texas Intermediate crude rose 7 cents, or 0.1 percent, to $68.16.
Mixed demand indications from China, the world’s biggest oil importer, have nonetheless weighed on the market, as has industry data showing a rise in US crude inventories.
Market sources citing American Petroleum Institute figures on Wednesday said that US crude inventories rose by about 5.2 million barrels last week.
“The current mood is one of pessimism,” said Tamas Varga of oil broker PVM. “Investors have been pragmatic and risk averse of late.”
Also in focus is the June 4 meeting of the OPEC+ producer group, in which the Organization of the Petroleum Exporting Countries and allies including Russia will discuss whether or not to cut oil production further.
British multinational bank Barclays has slashed the average price of its Brent crude forecast for this year from $92 to $87 a barrel. The bank also slashed its price forecast of Brent for 2024 as it cut the average projected price to $87 a barrel from $97.
Chinese company in Brazil
China’s CNOOC Ltd. has begun production at the Buzios5 well off the coast of Brazil, the company said in a statement on Thursday.
The well is the fifth phase of the Buzios oil field off Brazil’s southeast coast. At an average water depth of 1,900 meters to 2,200 meters, the field is the world’s largest deep-water pre-salt oil field, with daily production of 600,000 barrels, the company said.
CNOOC’s Brazilian subsidiary owns 7.34 percent of the Buzios shared reservoir, which is 88.99 percent owned by Brazilian state-owned oil and gas company Petrobras. CNOOC paid $1.9 billion to Petrobras last year to secure a 5 percent stake in a production sharing agreement at the field.
UAE’s in-country value projects driving billions to local firms
Updated 02 June 2023
ABU DHABI: More than $27.23 billion has been redirected to the local economy since the UAE Ministry of Industry and Advanced Technology (MoIAT) and ADNOC launched major in-country value programs to support domestic industries.
Speaking at the Make in the Emirates Forum, Abdulla Al-Shamsi, Assistant Undersecretary of MoIAT, said more than $14.43 billion of investment was redirected to the local economy last year alone, an increase of 25 percent year-on-year.
“The National In-Country Value Program is a nationwide program that speaks one language across many different sectors,” Al-Shamsi said. “It’s one methodology and this is something we’re very proud of because it benefits the private sector and when the private sector sees this it helps them prepare, invest, and spend.”
The forum heard how the National ICV Program is “functionating well and accelerating.”
The forum also heard how industrial zones are playing a critical role in the in the country’s sustainable industrial development and broader economic prospects. Local industrial leaders described how they are utilizing alternative energy resources such as solar and hydrogen to reduce their carbon footprint.
The second edition of the Make it in the Emirates Forum concluded on Thursday with the UAE showcasing its unique value proposition to international investors.
Investors were invited to explore opportunities and competitive advantages, with panel discussions focusing on the National In-Country Value (ICV) Program, the role of industrial zones, competitive financing as a key enabler and local talent in the private sector.
The UAE’s industrial exports reached $47.6 billion in 2022, growing 49 on 2021. The industrial sector's contribution to GDP rose to $49.5 billion in 2022, a 38 percent increase on 2020.
The Make it in the Emirates Forum is organized by the Ministry of Industry and Advanced Technology in partnership the Abu Dhabi Department of Economic Development (ADDED) and ADNOC.
On the first day of the forum, the UAE government announced $2.7 billion in industrial offtake agreements, building on the $29.9 billion of offtake agreements announced at the 2022 edition of the forum.