Amid global food supply concerns and surging world prices, Arab states are looking East in a bid to snap up vital farmland in order to stave off future crises. Qatar has revealed plans to pour money into Cambodia’s agricultural sector, while the UAE is planning to buy farms in Pakistan.
Qatar plans to invest approximately US$200m in Cambodian agriculture, and Hor Namhong, Cambodia’s deputy prime minister and minister of foreign affairs and international cooperation, said last week that the two countries were close to signing an agreement.
The announcement was made during a state visit by Sheikh Hamad bin Jassim bin Jabor Al Thani, Qatar prime minister and minister of foreign affairs. Under the proposed deal Qatar will provide funding to restore Cambodia's agricultural infrastructure, including an irrigation system for over 300,000 hectares of rice planting fields in the provinces of Savy Rieng, Prey Veng and Kampong Cham
In return, Qatar aims to lock down a deal to secure some of the purchasing options on yields from the crops, giving the Gulf state an opportunity to stake a claim on a reliable future food supply.
Already under severe inflationary pressure, Qatar has seen price tags at supermarkets increase dramatically in recent months as global demand outstrips supply chains despite government initiatives to fix and control prices. Inflation in Qatar, the world's largest exporter of liquefied natural gas, hit 13.7 per cent in the fourth quarter 2007, just short of a record. Last year, rents surged almost 28 per cent.
Meanwhile, according to the UAE’s Emirates Society of Consumer Protection (ESCP), talks with the Pakistani government are at an advanced stage as it considers alternative sources of food supply for the Gulf country.
“We believe that if we get products directly from the farms, it will encourage market competition," an ESCP official said, adding that similar plans in other countries were also under study.
A Pakistani government official confirmed the UAE was considering buying “large land holdings” and importing food items at 20-25 per cent less cost. “The talks [have been] going on between Pakistan government and UAE’s Ministry of Economy for some four months, however no concrete decision is made yet,” he said.
The UAE’s 4.5 million population relies heavily on imported food, spending $3.5 to $4 billion annually on imports. Under pressure from the government and consumers, a string of retailers - including French hypermarket giant Carrefour - have agreed in recent weeks to fix the price of basic food items at 2007 levels.
The Ministry of Economy is attempting to rein in inflation, but soaring food prices are the main driver of inflation across the world's biggest oil-exporting region, where most states peg their currencies to the ailing dollar.
Last week, Saudi Arabia’s cabinet approved plans to increase Saudi investments overseas in fisheries, livestock and food production. Although there has been no official word on the likely locations for this investment, the subcontinent is a probable destination.
Oman is securing 200,000 tonnes of rice, enough to feed the population for two years, in an effort to help consumers cope with soaring food commodity prices. The sultanate has also secured 50,000 tonnes of flour to meet local consumption.