How drought in Europe proved a blessing to Middle Eastern producers of olive oil

Palestinian farmers pick olives during harvest season at a grove in Khan Yunis in the southern Gaza Strip. (AFP)
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Updated 15 September 2023

How drought in Europe proved a blessing to Middle Eastern producers of olive oil

  • Disappointing harvests in Europe have given Arab producers a chance to assert dominance over competitors
  • The cooking ingredient is of considerable economic, cultural and agricultural value around the world

DUBAI: The latest victim of planetwide shifts in temperatures and weather patterns appears to be the ancient olive tree.

A yearlong drought coupled with a blistering summer in southern Europe, the heartland of olive oil production, has left Spain, the world’s largest producer, and other countries struggling to satisfy global demand for the kitchen staple.

As a result, manufacturers across Europe have turned their attention to the Middle East for help in overcoming the shortage.

“The supply gap needs to be filled and there’s no better time for the Middle East, and particularly the Gulf states, to begin filling this gap,” said Mazen Assaf, an olive oil sommelier and entrepreneur.

The Arab world is regarded as the birthplace of olive oil and is home to about 1,600 varieties of olives, says Mazen Assaf, an olive oil sommelier and entrepreneur.

“The opportunity is there and clearer than ever.”

In recent months, Italy and Portugal, the world’s second- and fourth-largest olive oil producers respectively, have also encountered climate-related setbacks, leading to diminished stocks.

In contrast, Greece, which is third largest producer, has benefited from mild weather and adequate rainfall throughout the year. Even so, it is struggling to meet the surging international demand for the commodity.

“Olive oil is a culinary staple that is deeply ingrained in Mediterranean culture. However, its influence spans the world,” Assaf told Arab News.

“Demand for it is growing globally and supply is dropping dramatically across Europe, which is leading to higher prices around the world.”

Typically, Spain produces more than 50 percent of the world’s olive oil, with an average of 1.2 million tons per year.

But for the past two years, a series of heatwaves marked by temperatures pushing 40 degrees Celsius have whittled the country’s output down to about 600,000 tons.

The Chetoui and Chemlali varieties are popular in Morocco and Tunisia, and the Souriani, which is native to the Levant countries. (AFP)

As a result, the price of a bottle of olive oil in Spain rose by about 60 percent in 2022 and currently hovers around 10 euros per liter at retail for the extra virgin type.

The reverberations of Spain’s drought and olive oil shortage are being felt in Turkiye, where the trade ministry has imposed a three-month ban on olive oil exports.

“Spain’s worries are not exclusive to it,” Assaf said, adding that wildfires were becoming an increasingly common phenomenon across the Mediterranean.

“The presence of the xylella fasticiosa bacteria in these lands is also slowly killing olive trees, leading to a further drop in supply,” he said, referring to Greece and Italy.

According to some reports, the deadly bacteria has killed more than 21 million olive trees in the southern Puglia region of Italy, which until recently accounted for half of the country’s olive oil production.

Naim Ben Said, a partner at the Dear Goodness mill in Tunisia, said global olive oil production had fallen 20 percent from the previous harvest season, primarily as a result of reduced output in Europe.


• VIRGIN: This is the pure juice extracted from olives through mechanical means. Depending on specific quality parameters like acidity and oxidation, it can also be classified as extra virgin.

• MIXED: Also known as pure or ordinary olive oil, this is a blend of extra virgin and, typically, chemically refined oil.

• POMACE: This is extracted from the residue of olives after the initial pressing process.

Source: Naim Ben Said, partner at the Dear Goodness mill in Tunisia

“In terms of global consumption, the EU, US and Turkey account for more than 65 percent of the total,” he told Arab News.

In terms of per capita consumption, Greece ranks top with an annual average of 12.7 liters, followed by Spain with 11.6 and Italy with 9.1.

By comparison, in the Middle East and North Africa region, Morocco has the highest per capita annual average consumption with four liters, followed by Syria with 3.9 and Tunisia with 2.5, according to Said.

With the current production levels predicted to become the new normal, several countries in the Middle East, notably Lebanon, Tunisia, Morocco and Jordan, are helping to cover the shortfall.

An aerial view of an orchard of olive and fig trees in the village of Kurin in the rebel-held southern part of Syria’s northwestern Idlib province. (AFP)

According to Assaf, the Arab world is regarded as the birthplace of olive oil and is home to about 1,600 varieties of olives, including the Chetoui and Chemlali that are popular in Morocco and Tunisia, and the Souriani, which is native to the Levant countries and known for its exquisite flavor and high levels of antioxidants.

“Lebanon has seen a surge in exports, while Tunisia and Morocco have historically exported over 90 percent of their production to Europe, where it is bottled and filled as European oil,” he said.

Despite being in the grip of a severe and prolonged economic crisis, and the related challenges of labor shortages, power disruptions and soaring inflation, Lebanon produced 17,000 tons of olive oil in 2022-23, in keeping with its five-year average.

Facilities in Saudi Arabia and Jordan have also ramped up their production capacity.

The latter has maintained a steady supply of olive oil despite the setbacks dealt by climate change and water scarcity. Production is predicted to increase by up to 25 percent during the next season, with a slight rise in prices, according to the Jordanian Olive Presses Owners’ Syndicate.

In recent years, Jordan’s olive oil production has experienced fluctuations, including a decline from 34,720 tons in 2019 to 23,000 tons in 2021. But the outlook is bright.

The olive oil industry plays a crucial role in countries across the MENA region, providing a livelihood for farmers and supporting domestic and international trade. (AFP)

According to its agriculture ministry, Jordan is home to about 11 million olive trees, accounting for 72 per cent of its fruit tree cover and nearly 30 per cent of its cultivated area.

The likelihood of global temperatures surpassing the critical 1.5 degree increase threshold by 2027 poses a significant threat to the olive oil harvest cycle in many Arab countries, including Jordan.

“The impact of this is pushing the world into uncharted territory, where similar climatic scenarios to those playing out in Europe cannot be ruled out for countries in the Middle East and North Africa,” said Farah Najem, a senior consultant at engineering and professional services firm WSP.

She said that the current olive oil crisis presented a unique situation for economies in MENA, many of which had a traditional reliance on primary industries such as olive harvesting.

“From the Greeks to the Romans, to multiple geographies across MENA, olives have found their way into the bowls and plates of civilization for centuries,” she told Arab News.

The olive oil industry plays a crucial role in countries across the MENA region, providing a livelihood for farmers and supporting domestic and international trade.

Despite the challenges facing the industry there is still reason for optimism, with innovative and sustainable strategies helping to ensure its future, according to Najem.

According to Fortune Business, the size of the global olive oil market currently stands at $14.20 billion. (AFP)

“Many initiatives for increased food production in the region demonstrate the resolve to overcome geographical limitations, water scarcity and climatic difficulties,” she said.

Such initiatives showed how sustainable production could be a key factor in preserving food security and economic stability, she said.

“The upshot for countries in the Middle East with active food and water security initiatives is that they can position themselves to create robust domestic food security mechanisms while enhancing economic stability against global market fluctuations,” Najem said.

According to Fortune Business, the size of the global olive oil market currently stands at $14.20 billion, and it is expected to grow to $18.42 billion in 2030 — that is, at a compound annual growth rate (CAGR) of 3.3 percent. In the Middle East and Africa (MEA) region specifically, the market size is expected to grow at a CAGR of 2.18 percent over the same period.

“This represents a significant growth projection for MENA, a region that is home to several countries leading the charge to be at the forefront of the global food security agenda,” Najem said.

Meanwhile, non-Mediterranean countries have also been witnessing a steady increase in demand for olive oil.

“Olive oil is the healthiest of fats, it is packed with antioxidants and is a core ingredient of the healthy Mediterranean diet,” Assaf said.

“With it being naturally vegan, it is becoming ever more attractive to the average consumer.”

“Olive oil is the healthiest of fats, it is packed with antioxidants and is a core ingredient of the healthy Mediterranean diet,” Mazen Assaf said.

He said there had been a surge in demand for olive oil in the US — along with a sharp increase in production, especially in California — as well as in Southeast and East Asia, where countries like Japan had shown a keen interest in olive oil production as consumption soared.

Chile, Australia, Argentina and Brazil are also known to be increasing production, which points to a bright future for the olive oil industry, which is of considerable economic, cultural and agricultural value around the world.

Assaf said: “I am sure that this industry is not one we will let go of lightly. Olive oil is our culture, our heritage, our passion, our lifeline and our love.”

How eight mega-projects are transforming Saudi Arabia’s Riyadh into a global destination

Updated 22 September 2023

How eight mega-projects are transforming Saudi Arabia’s Riyadh into a global destination

  • Sports Boulevard, New Murabba, Qiddiya and King Salman Park are just some of the city’s highly-anticipated attractions
  • These sustainable and innovative urban spaces will promote culture, heritage, entertainment, leisure and recreation

RIYADH: Saudi Arabia’s Vision 2030 is paving the road for a better future by implementing transformative projects across the Kingdom. These projects aim to integrate advanced technologies and sustainable practices, ultimately enhancing the standard of living and quality of life for residents.

These projects, including Sports Boulevard, New Murabba, Qiddiya, and King Salman Park, are part of Saudi Arabia’s Vision 2030.

They are designed to create sustainable and innovative urban spaces, promote sports and recreational activities, enhance cultural and heritage sites, and provide entertainment and leisure options for residents and visitors. 

Saudi Arabia’s Vision 2030 is paving the road for a better future by implementing transformative projects across the Kingdom. These projects aim to integrate advanced technologies and sustainable practices, ultimately enhancing the standard of living and quality of life for residents.

These projects, including Sports Boulevard, New Murabba, Qiddiya, and King Salman Park, are part of Saudi Arabia’s Vision 2030. They are designed to create sustainable and innovative urban spaces, promote sports and recreational activities, enhance cultural and heritage sites, and provide entertainment and leisure options for residents and visitors.

Sports Boulevard

Sports Boulevard is the world’s largest linear park, stretching more than 135 km. It encompasses an investment area of 2.3 million sq m and features 4.4 million sq m of green and open spaces.

The park will be home to 50 sports facilities, making it a popular destination for a wide range of visitors, including pedestrians, cyclists (both professional and amateur), horse riders, art and culture enthusiasts, and individuals who prioritize eco-friendly activities. The park’s pathways and spaces have been carefully designed to encourage and support a healthy lifestyle.

Sports Boulevard in Riyadh is divided into eight distinct districts, each characterized by its distinctive design and accompanied by pathways and trails, providing a one-of-a-kind experience.

These districts include Wadi Hanifah, Wadi Al-Yasin, Wadi Al-Sulai, Arts District, Entertainment District, Athletics District, Eco District, and Sand Sports Park. Together, they offer an opportunity to promote healthy living and provide a diverse range of entertainment options in a modern and appealing manner.

New Murabba

Big enough to hold 20 Empire State buildings, the New Murabba is set to be the biggest contemporary downtown in Riyadh, thereby supporting the city’s future growth according to the goals of Saudi Vision 2030.

The New Murabba aims to incorporate the concept of sustainability by including green spaces and dedicated paths for walking and cycling. These measures are designed to enhance overall well-being by promoting healthy and active lifestyles and fostering community engagement.

Additionally, the project will feature a museum, a state-of-the-art technology and design university, a versatile immersive theater, and more than 80 destinations for entertainment and cultural activities.

The development in northwest Riyadh, at the intersection of King Salman and King Khalid roads, will cover 19 sq km and provide housing for residents. It will include more than 25 million sq m of floor space, including residential units, hotel rooms and retail space. There will also be office space, recreational facilities and community amenities. The New Murabba development aims to offer a convenient lifestyle with living, working, and entertainment options within a 15-minute distance. It will have its own transportation network and be a 20-minute drive from the airport.


The Qiddiya project aims to become a groundbreaking city globally renowned for offering the most imaginative and captivating experiences. Qiddiya strives to create a thriving and enjoyable city centered around entertainment, sports and culture.

It is creating numerous exciting attractions, including theme parks suitable for families. These sports arenas can host international competitions, sports and arts academies, concert venues, racetracks for motorsport enthusiasts, and outdoor adventure activities that offer experiences with nature and the environment. Qiddiya will also provide various real estate options and community services.

The 32-hectare site will include 28 rides and attractions across six different themed areas. The 4 km Falcon’s Flight rollercoaster ride will be the centerpiece of the park, and will touch speeds of 250 km an hour and includes a dive of 160 m.

But the rollercoaster is just a small part of the Qiddiya giga-project, which will include arts centers, festival grounds, a sports stadium, shops and restaurants, housing developments, a motor racing circuit and a golf course designed by 18-time major winner Jack Nicklaus.

King Salman Park

King Salman Park is being constructed on more than 16 sq km of land, making it the largest urban park in the world. The park will offer diverse activities and options for residents and visitors of the city. Its environmental elements will significantly increase vegetation in the region and provide more per capita green spaces.

Green areas and open spaces will cover more than 9.3 million sq m, including an Islamic-style garden, a vertical garden, a maze garden, and a bird and butterfly sanctuary. These gardens span more than 400,000 sq m, with a circular pedestrian walkway extending for 7.2 km, a valley area of more than 800,000 sq m, and 300,000 sq m of water features.

The park’s Royal Art Complex will include a national theater with a seating capacity of 2,500, five museums, an outdoor theater accommodating 8,000 audience members, a complex with three cinema halls, four art academies, and an educational center for children.

The sports and entertainment facilities will feature a 850,000 sq m royal golf course, a virtual reality court, a skydiving center, an equestrian center, and running and biking routes.


Diriyah, the historical birthplace of Saudi Arabia, is a treasure trove of more than 30 cultural establishments, including museums and academies. It takes visitors on a captivating journey through the Kingdom’s vibrant history and offers many opportunities to engage with contemporary art.

Turaif, a UNESCO World Heritage site, gives visitors the chance to immerse themselves in captivating performances, interactive exhibitions, educational trails and advanced technologies that together help to showcase Diriyah’s past.

The Old Town features an art district that includes galleries, workspaces and creatively designed residences, while the Period Village recreates a 300-year-old local lifestyle, complete with bustling markets, artisanal shops, workshops, and delectable traditional cuisines.


The Jax district in Diriyah brings together talented professionals and aspiring artists to express the essence of life through vibrant colors. Their captivating creations are on display throughout the area.

As visitors explore the district, they encounter an array of installations in hallways and public spaces that offer an incredible visual and sensory experience and immerse them in the world of contemporary art.

The district also plays a significant role in promoting art and culture in Diriyah. In 2021 and 2022, it was home to the Diriyah Biennale Foundation, which hosted the Kingdom’s first international contemporary art biennale, in Riyadh. The event attracted artists and enthusiasts from around the world, further solidifying the Jax district’s reputation as a prominent cultural destination.

King Abdullah Financial District

Riyadh’s King Abdullah Financial District is a thriving hub that embodies the vision of the late ruler it is named after for the creation of a prosperous financial center. Aligned with the goals Vision 2030, the district contributes to the expansion and diversification of the Kingdom’s economy, while also providing a dynamic environment within the community.

Its impressive buildings, inspired by the local natural landscape, have reshaped the Riyadh skyline. They offer state-of-the-art office facilities and sustainable smart city solutions that empower businesses to thrive.

Additionally, the district contains exceptional recreational and retail amenities designed to help provide a distinctive lifestyle experience. Through its remarkable architecture and vibrant atmosphere, it is a symbol of economic growth and community vitality.

Diplomatic Quarter

The Diplomatic Quarter, also known as Al-Safarat, is a vibrant area that houses embassies, residential complexes, and a wide variety of dining options. It is also home to important cultural sites, including Tuwaiq Palace, with its unique tent-like structures and panoramic views of Wadi Hanifa.

The Cultural Center, meanwhile, is a spacious two-story building with a large celebration hall, an auditorium equipped with state-of-the-art technology, and a partially covered outdoor area for performances and other celebrations.

Saudi Maritime Congress makes a splash

Updated 22 September 2023

Saudi Maritime Congress makes a splash

DAMMAM: Business cards were traded as fast as wheeled suitcases rolled at the Saudi Maritime Congress as thousands of key players from the industry descended on Dammam.

The fourth edition of the event saw deals struck, debates held, and networking carried out as the Kingdom drives forward with its goal of becoming a global logistics hub.

Held over two-days at the Dhahran Expo venue, this year’s gathering focused on the maritime and logistics sector throughout the Gulf Cooperation Council region – with a specific emphasis on Saudi Arabia’s economic diversification plan Vision 2030.

The event took place just days before the Kingdom was due to celebrate its 93rd National Day  – a milestone which was repeated with pride numerous times by different speakers.

Omar Hariri, president of the Saudi Ports Authority, also known as Mawani, and Ahmed Al-Subaey, CEO of transportation and logistics company Bahri, delivered keynote addresses on the opening day of the event.

“The Saudi maritime sector possesses vast potentials, and this conference is an ideal platform to showcase our capabilities to the world,” said Al-Subaey, adding: “The development of the maritime and logistics sector is vital in realizing the Kingdom’s Vision 2030 objectives.

“Bahri is committed to focusing on leveraging its accumulated experience for the sector’s development within the Kingdom and across the globe.”

Arab News spoke to Chris Morley, group director of Seatrade Maritime, the organizer of the event, and he was keen to flag up how Saudi Arabia’s improvements in the logistics arena are expected to boost port revenue – an increasingly important non-oil source of growth.

He said: “By building out inland logistics hubs and enhancing rail connectivity, the Kingdom is looking to more than quadruple the country’s annual container throughput to 40 million TEU (twenty-foot equivalent units) by 2030.”

Morley noted that the Kingdom has 53,000 ships operating within its borders, and those vessels are registered in over 150 countries and carry up to 11 billion tonnes of cargo annually.

He said Saudi Arabia’s rise on global connectivity indexes shows the Kingdom is “a powerful and promising partner for more regional and global trade.”

Morley added: “The event has been really exciting and reflects the eagerness of the global industry to be part of Saudi Arabia’s commitment to developing its maritime trade and doing business on an international scale.”

UAE-based Abdulla bin Damithan, CEO and managing director at DP World GCC, traveled to Dammam for the event and spoke to Arab News about his hopes for the deepening of ties between his country and Saudi Arabia in the future.

He emphasized how his role at DP World has recently expanded to go beyond the UAE and into the entirety of the GCC, and how the Kingdom would be one of his main focuses going forward as he attempts to help support the transformation of Saudi Arabia through innovation and investment into a global logistics hub.

“With the Kingdom’s Vision 2030, maritime is one of the focuses of the future – not only between Saudi Arabia and the UAE but also between our nations as a GCC,” he said.

Bin Damithan stressed that technological developments in the sector are having wide-reaching impacts, adding: “Technology means that we're making things much easier and creating new jobs, jobs for the young nationals of the country.

“But the most important thing, I think, is including our female colleagues who are entering into this job, where it was limited before.”

Saudi Arabia and DP World operate the South Container Terminal at Jeddah Islamic Port, the largest harbor in the Kingdom and a crucial link in the world’s busy “east-west” trade routes through the Red Sea.

With an investment of $800 million, DP World has ambitions of doubling the terminal’s capacity from 2.5 million TEUs to 5 million. Set to be finalized by 2024, the project aims to propel Jeddah Islamic Port to become a global trade and a logistical services hub.

Omar Hariri, president of the Saudi Ports Authority.

As well as discussions and debates, the event saw agreements being signed by major players in the industry

Bahri signed a Memorandum of Understanding with SAIL, a subsidiary of the Saudi Investment Recycling Co., to mutually strengthen their offerings within the Kingdom.

The latter firm, owned by Public Investment Fund, was launched in June 2022 as a marine environmental services company, which will act as a regional hub when it comes to responding to oil and hazardous spills along the coastlines of Saudi Arabia.

The alliance with Bahri aims to facilitate maritime sector development and the provision of technical support, while also promoting knowledge and expertise exchange between the two companies.

Ziyad Al-Shiha, CEO of SAIL, said this agreement would play a pivotal role in shaping the future of the maritime sector to benefit from the rapid developments, and to help consolidate the Kingdom’s position as a global hub in this industry.

His equivalent in Bahri, Al-Subaey, stressed the importance of this strategic cooperation, noting that the strengths and joint expertise between the two companies would contribute to the establishment of an ecosystem that promotes innovation, and provides new job opportunities.

Another deal involved Mawani signing a partnership agreement with SIRC aimed at promoting maritime sustainability in Saudi Arabia.

The Saudi Maritime Congress was supported by founding strategic partners Bahri and Seatrade Maritime, with support from Mawani, the Transport General Authority, Saudi Aramco and IMI.

The exhibition space featured over 120 organizations representing main sectors of the maritime industry including shipping, shipbuilding, artificial intelligence, as well as port and terminal management and finance.

Firms with booths included Saudi Global Ports Co, Bass Global Marine Services, and Hong Kong Marine Department.

Last year, a record 3,757 visitors attended the event and this year’s final numbers are projected to be close to that.

Chris Hayman, chairman of Seatrade Maritime, used a speech to describe Saudi Arabia as “taking a more active role in global maritime affairs.”

According to Seatrade Maritime News, he said the conference provided one of the first opportunities for the industry to discuss the implications of the new and accelerated pathway towards decarbonisation agreed at the International Maritime Organization’s recent Marine Environment Protection Committee meeting just two months ago.  

He said: “The adoption of the new technologies and the availability of zero carbon fuels needed to meet the new timetable together represent a major challenge for the global industry.

“Driven by the exciting development now unfolding here in the Kingdom, the level of support for Saudi Maritime Congress 2023 has grown substantially from last year.  

“With an increase in overall attendance of more than 50 percent and a greatly expanded exhibition, this event is on track to join the elite group of world class maritime events, matching Saudi Arabia’s growing status as a global maritime hub.”

Oil Updates – prices rise as supply concerns outweigh demand fears

Updated 22 September 2023

Oil Updates – prices rise as supply concerns outweigh demand fears

TOKYO: Oil prices rose on Friday as concerns that a Russian ban on fuel exports could tighten global supply outweighed fears that further US interest rate hikes could dent demand, but they were still headed for their first weekly loss in four weeks, according to Reuters.

Brent futures climbed 50 cents, or 0.5 percent, to $93.80 a barrel by 6:50 a.m. Saudi time, while US West Texas Intermediate crude futures gained 63 cents, or 0.7 percent, to $90.26 a barrel.

Both benchmarks were on track for a small weekly drop after gaining more than 10 percent in the previous three weeks amid concerns about tight global supply as the Organization of the Petroleum Exporting Countries and its allies maintain production cuts.

“Trading remained choppy amid a tug-of-war between supply fears that were reinforced by a Russian ban on fuel exports and worries over slower demand due to tighter monetary policies in the United States and Europe,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co. Ltd.

“Going forward, investors will focus on whether the OPEC+ production cuts are being implemented as promised and whether the rise in interest rates will reduce demand,” he said, predicting WTI to trade in a range of around $90-$95.

Russia temporarily banned exports of gasoline and diesel to all countries outside a circle of four ex-Soviet states with immediate effect to stabilize the domestic fuel market, the government said on Thursday.

The shortfall, which will force Russia’s fuel buyers to shop elsewhere, caused heating oil futures to rise by nearly 5 percent on Thursday.

“Crude oil bounced off a session low after Russia banned diesel exports, which included gasoline. The action reversed a downside movement in crude markets following the hawkish Fed decision on Thursday,” said Tina Teng, an analyst at CMC Markets, in a note.

“However, mounting fears of a recession in the Eurozone could continue pressuring oil prices.”

The US Federal Reserve on Wednesday maintained interest rates, but stiffened its hawkish stance, projecting a quarter-percentage-point increase to 5.50-5.75 percent by year-end.

That buoyed fears that higher rates could dampen economic growth and fuel demand while boosting the US dollar to its highest since early March, making oil and other commodities more expensive for buyers using other currencies.

The Bank of England mirrored the Fed and held interest rates on Thursday after a long run of hikes, but said it was not taking a recent fall in inflation for granted.

A European Central Bank governing council member said the central bank will most likely keep interest rates stable at its next policy meeting. 

Pakistan seeks $6bn for corporate farming from Saudi Arabia, other Gulf nations by 2028

Updated 22 September 2023

Pakistan seeks $6bn for corporate farming from Saudi Arabia, other Gulf nations by 2028

  • Arab News speaks exclusively to CEO of FonGrow, spearheading agriculture projects under new investment body
  • Pakistan in talks with Saudi companies like Al-Dahara, Saleh and Al-Khorayef for investment in corporate farming

ISLAMABAD: Pakistan is seeking up to $6 billion investment from Saudi Arabia, the United Arab Emirates (UAE), Qatar and Bahrain over the next three to five years for corporate farming, with the aim of cultivating 1.5 million acres of previously unfarmed land and mechanizing existing 50 million acres of agricultural lands across the country, the CEO of the company spearheading the initiative has said.

The development comes months after Pakistan set up a Special Investment Facilitation Council (SIFC) — a civil-military hybrid forum — to attract foreign funding in agriculture, mining, information technology, defense production and energy as the South Asian country deals with a balance of payments crisis and requires billions of dollars in foreign exchange to finance its trade deficit and repay its international debts in the current financial year.

Earlier this month, caretaker Prime Minister Anwaar-ul-Haq Kakar said Saudi Arabia and the UAE would invest up to $25 billion each in Pakistan over the next five years in the mining, agriculture and information technology sectors.

Initiatives in the agriculture sector under SIFC are being administered by FonGrow, which is part of the Fauji Foundation investment group run by former Pakistani military officers.

“We have estimated about $5-6 billion [investment from Gulf nations] for initial three to five years,” Major General (retired) Tahir Aslam, FonGrow’s managing-director and chief executive officer, told Arab News in an interview. 

He declined to share details about the breakdown of the investment from each individual country.

The CEO said the company was engaging with several Saudi companies like Al-Dahara, Saleh and Al-Khorayef to attract investment in the corporate farming sector. He did on elaborate on progress made so far in the discussions. 

Aslam said his company was also working on different investment models with the Saudi and UAE companies for corporate farming, including joint ventures.

“If they want to make direct investment, it is a corporate model. So, they will take an equal number of stakes in the company, and they get an equal number of positions in the governance [of the company]. So, it is going to be a joint company.”

About strategy and targets to mechanize farming, Aslam said FonGrow was working on a two-pronged approach to bring up to 1.5 million acres of new arable land under cultivation and modernize 50 plus million acres of land already being farmed.

This, he said, would require about “$25 million per each thousand acres and other for machinery, and setting up of infrastructure for value addition.”

FonGrow is aiming to set up corporate farms on over 100,000 acres in the next 5-7 years. The first such farm had already been established on over 5,000 acres of land in Khanewal, he said. 

“Next year, we will be starting our second farm on over 10,000 acres and we hope to develop the capacity to be able to develop 20 to 25 thousand acres every year,” Aslam said. “Mainly, we are starting in Punjab and then we are looking for lands. Wherever we get suitable lands, we will go to all the provinces.”

To a question about the source of capital to develop the land, the official said: “We have no issue of rupee capital availability for our project because ultimately it will bring returns to Fauji Foundation.”

“There is a small challenge that we are facing basically, which is of foreign exchange because the irrigation systems and the tractors and harvesters that we have to import, they need foreign exchange.”

Aslam said Pakistan’s corporate farming model envisioned that sixty percent of the crops would contribute to the country’s food security, and the remaining 40 percent would be exported mainly to Gulf countries to earn foreign exchange. 

He said Pakistan had received a first export order of Fauji cereal products from a Gulf nation, though he declined to name the country:

“It is a starting quantum [that] is about $25 million worth of products in one year. But I think as we break more grounds this will continue to increase in the coming years.” 

Responding to concerns about the army’s involvement in economic projects in Pakistan, he said the military was only contributing where requested by the civilian government.

“They [foreign countries] wanted an organization which provides continuity or security of their investment, that was the reason the army joined in and then the army also said we have such a large [investment] potential available,” the FonGrow CEO said.

“In the past also, the army has very willingly contributed to projects of nation-building and national importance … Army is playing its part, but no soldiers are involved.”

Saudi Arabia elected ISO council member for two years

Updated 21 September 2023

Saudi Arabia elected ISO council member for two years

RIYADH: In recognition of its efforts to implement health and safety standards, Saudi Arabia has been elected as a member of the council of the International Organization for Standardization, the Saudi Press Agency reported.

The Kingdom will maintain the position for a two-year period starting 2024, it said.

This was announced during ISO’s 45th general assembly meeting held in Brisbane in Australia.

The Saudi Standards, Metrology, and Quality Organization, known as SASO, represented the Kingdom at the recent ISO meetings.

SASO is committed to the ongoing enhancement and revision of Saudi standards and technical regulations, with its efforts aimed at safeguarding the nation’s markets against counterfeit, substandard, and deceptive products, ultimately bolstering the national economy. 

Meanwhile, ISO, which came into existence in 1947, is an independent, nongovernmental international organization with 169 members.