By Santhosh V Perumal/Business Reporter
Food consumption growth in Qatar is expected to outpace that of other Gulf countries on rising population and increase in tourist arrivals and the country is also expected to witness acceleration of food prices, according to Alpen Capital.
“Between 2012 and 2017, Qatar’s population is expected to grow at a compound annual growth rate (CAGR) of 4%, while the average for the GCC region is only 2.4%. This trend correlates to the 5% growth in food consumption in Qatar during 2012-2017, higher than all other GCC countries,” Alpen Capital said in a latest report.
Noting that Qatar is more affluent compared to other member countries in GCC with the highest per capita income, Alpen Capital said with an “enviable” economic outlook and growing private consumption, “we forecast food consumption in Qatar to grow at a CAGR of 5% during 2012–2017.”
Similar to Saudi Arabia, cereal is the staple food in Qatar, it said, adding cereals and vegetables are an integral part of food consumed in the country.
During 2012–2017, it expects cereals and vegetables to remain the largest segments across food categories. However, with rising affluence, “We expect demand for high-value products such as milk, meat and fruits to outpace growth in other food categories,” it said.
During this period, fruit and milk consumption is likely to grow at a CAGR of 6% and 5.5%, respectively, followed by vegetables (5.3%), meat (5.2%) and cereals (4.3%).
In addition to strong macroeconomics, Qatar’s bid for the 2022 FIFA World Cup is likely to boost tourism activity in the country. This would translate into increased food consumption, it said.
“Owing to the combined effect of these factors and higher domestic consumption, over the next decade, we expect Qatar’s food industry to continue growing at a pace faster than those of other GCC countries,” Alpen Capital said.
Observing that only 1% of land is arable in Qatar, it said the country meets only 7.2% of its domestic food demand, thus relying largely on imports.
Highlighting that higher dependency on imports of food makes it more susceptible to fluctuations in global food prices, Alpen Capital said: “Food prices are likely to increase in Qatar as food supply would be reduced due to the US drought.”
Otherwise, the Gulf food sector is also likely to experience robust growth in the medium to long term due to rising affluence levels, growing population, urbanisation and proliferation of organised retail trade, it said.
The food consumption in the GCC region will expand at a CAGR of 3.1% over 2012-17, reaching 49.1mn metric tonnes by the end of 2017, it said in a report.
This increase is attributed to the rapidly growing population in the GCC, increase in foreign tourists as well as the rising income levels of the region, it said.
Per capita food consumption for the GCC region is forecast to reach 971.2 kg by 2015 and 983.0 kg by 2017, it added.
During 2012–2017, even though cereals are expected to maintain their dominant position among food items, it said due to rising affluence consumption of protein rich and high value products such as a meat and fruits are slated to increase.