GCC FOOD CONSUMPTION TO RISE
The GCC is all set to witness growth in food consumption on increased consumer base coupled with a higher per capita income, as economies stage a sustained economic recovery from the recent downturn, said Alpen Capital’s GCC Food Industry report said. The report states that the GCC is on a sustainable and balanced growth path.
“We expect the GCC food industry to grow at a sustainable pace. This growth is primarily attributable to factors such as growing population, higher per capita income, and a vibrant tourism market, changing dietary habits and preferences and increasing penetration of organised retail,” said Sameena Ahmad, managing director of Alpen Capital. She said the government, as well as, private sector investments are being channelled towards augmenting the domestic food production capacity and supply, even as securing food sources in other resource-rich countries remains a key priority
The GCC population is expected to witness an addition of 6.5 million individuals between 2016 and 2021. The growing consumer base will continue to act as the chief contributor to the growth in food consumption in the region. A growing proportion of working couples has led to an increase in demand for packaged foods and ready meals. Economic growth in the GCC is expected to gradually gather momentum in line with stability in the oil prices and expansion of the non-oil sectors. Subsequently, GDP per capita in the region is projected to expand annually by 3.7 per cent between 2016 and 2020, a strong indicator of increasing food consumption.
The increasing influx of tourists into the GCC will also play a role in the growth of food consumption. Additionally, seasonal events such as Ramadan, shopping festivals, and food festivals will continue to boost food consumption in the region. Increasing penetration of organised retail formats such as hypermarkets and supermarkets is likely to support the region’s demand for packaged, healthy, and processed foods. To strengthen food security and build a sustainablesupply, GCC countries are looking at ways to boost the domestic produce. Such developments, if fruitful, are likely to augment the scale of the food sector and reduce import dependency.
The food consumption in the GCC is expected to expand at a CAGR of 4.2 per cent from an estimated 48.1 million metric tonnes in 2016 to 59.2 million metric tonnes in 2021. This growth is primarily attributable to increase in the consumer base coupled with a higher per capita income, as the GCC economies stage a sustained economic recovery from the recent downturn. Saudi Arabia and the UAE are likely to remain the major food consumption centres during the forecast period. The country-wise share in total GCC food consumption is anticipated to remain largely unchanged until 2021.
IRAN TO EXPORT OIL TO RUSSIA
TEHRAN – Iran will sign an agreement with Russia to start exporting 100,000 barrels per day of crude oil to the neighboring country by the next two weeks, Shana reported quoting Iranian oil minister as saying.
Bijan Namdar Zanganeh made the remarks after a meeting with Russian Energy Minister Alexander Novak in Tehran. Novak visited Iran to attend the inauguration ceremony of a 1,400-megawatt thermal power plant project financed to the tune of Ä1.2 billion by Russia in the city of Sirik, southern Iran.
According to Zanganeh, 50 percent of the oil payment will be in cash and the other 50 percent will be in the form of products and services. Further in his remarks, the Iranian minister expressed appreciation for Russia’s positive cooperation with the Organization of the Petroleum Exporting Countries (OPEC) regarding the last November’s decision to cut production levels.
Novak said on Monday that Russia is cutting down its oil production in February ahead of the OPEC deal schedule, Reuters reported. “In February, we are going ahead of the schedule planned for this month,” Novak told reporters.
GROUND BREAKING FOR IRAN-RUSSIA POWER PLANT
Russian contractor Technopromexport is set to implement the project which is estimated to be completed in 55 months. Iran had signed a memorandum of understanding with the Russian company in August 2016. The first unit of the power plant will be synchronized with the country’s national grid within 41 months.
A 100,000-cubic-meter desalination unit is also set to be installed in the site which will operate on the emissions from power plant; thereby increasing its efficiency.
Iranian Energy Minister Hamid Chitchian and his Russian Counterpart Alexander Novak attended the groundbreaking ceremony, Tasnim news agency reported.
On the sidelines of the ceremony, the Russian minister mentioned Iran-Russia positive economic relations saying “Trade turnover was $2.2 billion in 2016; it grew by nearly $1 billion, by 70 percent.” Technopromexport has a long history of cooperating with Iran’s energy sector. The company has constructed Ahvaz’s Ramin 2,100MW and Isfahan’s Shahid Montazeri 1,600MW power plants.
SOLID PERFORMANCE OF UAE BANKS
The “core profitability” of five largest banks in the UAE, which posted a combined net profit of Dh6.8 billion in fourth quarter 2016, will remain solid over the next 12-18 months, Moody’s said.
The solid performance of the five banks’ – Emirates NBD, National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, First Gulf Bank and Dubai Islamic Bank – was underpinned by stable core income from higher fee and commission income from retail and corporate lending services, the ratings agency said. “We expect the five large UAE banks’ core profitability to remain solid over the next 12-18 months,” said Nitish
Bhojnagarwala, Assistant Vice President at Moody’s. “However, we anticipate pressure from rising funding costs as liquidity continues to tighten, and as banks increase their reliance on wholesale funding.”
In the fourth quarter, overall net profitability was two per cent lower than in the previous quarter, and down five per cent from fourth quarter 2015, largely driven by decline in “other” income, including one-off gains, dividends from investments, and other non-recurring income. Combined deposits at the five banks grew by two per cent to Dh991 billion relative to third quarter 2016 while their combined Tier 1 capital ratio increased to 17.3 per cent from 16.9 per cent the previous quarter.
By the first quarter 2017, Moody’s expects a planned merger between NBAD and FGB to be completed. As of December 2016, these five banks accounted for a combined 62 per cent of the UAE banking system by total assets. “In the fourth quarter, the banks’ overall profitability was resilient, despite a decline in UAE’s non-oil real GDP growth to 2.5 per cent in 2016 from a 2012 peak of 6.4 per cent, weighed by weak oil prices. The banks’ fourth quarter performance was underpinned by higher fee and commission income from retail and corporate lending services. This helped offset a modest increase in operating expenses and higher funding costs, which rose to 1.2 per cent from 0.9 per cent a year earlier due to tightening liquidity conditions,” Moody’s analysts said.
In 2017, analysts anticipated pressure from rising funding costs as liquidity continues to tighten, and as banks increase their reliance on wholesale funding. “We also expect a rise in impairment charges driven by continued economic slowdown.” “The group’s liquidity position remained strong, bolstered by a stable and highly-diversified deposit base and the bank’s ability to raise over Dh20 billion of term funding. Given the ongoing challenging environment, we will remain focused on controlling expenses and managing risks whilst ensuring that we continue to invest to support future growth.”
KUWAIT DECLARES EMERGENCY OVER OIL LEAK
Kuwait’s national oil company has declared a state of emergency over an oil leak in one of its southwestern oil fields. The statement by the Kuwait Oil Co. did not identify the onshore oil field affected by the leak, which began Sunday. The state-run Kuwait News Agency said the leak hit the Al Maqwa field.
The company said there’s no sign of a toxic gas leak. It offered no details about how many barrels of oil had been spilled. Eastern Saudi beaches were not affected by the leak, according to an official statement. OPEC member Kuwait is a major oil producer. The US Energy Information Administration says Kuwait produces some 2.7 million barrels of crude oil a day and holds the world’s sixth-largest oil reserves. In August, Kuwait announced a spill at its Ahmadi field. A February fire struck another oil well after a spill.
OIL PRICES TO REMAIN VOLATILE IN 2017
Global oil prices will witness “much more volatility” in 2017 even though markets may rebalance in the first half of the year if output cuts pledged by producers are implemented, the head of the International Energy Agency (IEA) said .
The Organization of the Petroleum Exporting Countries (OPEC) agreed on Nov. 30 to cut output by 1.2 million bpd to 32.5 million bpd for the first six months of 2017, in addition to 558,000 bpd of cuts agreed by independent producers such as Russia, Oman and Mexico.
“I would expect that we will see a rebalancing of the markets within the first half of this year,” said Fatih Birol, executive director of IEA, the Paris-based global energy watchdog. “But what I want to say (is) that we are entering a period of much more volatility in the market … the name of the game is volatility,” he told Reuters Television in Abu Dhabi.
Prices fell on Friday and ended the week 3 percent lower on lingering doubts over the extent of OPEC cuts, with sentiment worsened by concerns over the economic health of the world’s second-largest oil consumer, China, after it reported the steepest falls in overall exports since 2009. Birol said although the OPEC agreement could signal higher oil prices, it would also encourage more production from the United States and elsewhere. Higher prices could also weaken global demand for oil, he added.
OPEC and the independent producers are cutting supplies to remove a global glut and prop up prices, which at around $56 a barrel are half their level of mid-2014, hurting the revenue of exporting nations. Birol said his main concern now was lack of investment in new oil supplies after low prices over the past two years forced the shutdown of many projects across the world. “This year, if there are no major investments coming we may well see in a few years from now significant supply-demand gap with serious implications on the market.”
GLOBAL ENERGY SUMMIT IN ABU DHABI
The 10th World Future Energy Summit (WFES) opens on Monday in Abu Dhabi, with the 2017 edition expected to be the biggest ever. Around 880 companies and 38,000 attendees will participate in the 10th World Future Energy Summit.
Hosted by Masdar as part of Abu Dhabi Sustainability Week, the WFES drives the business case for sustainability. Held under the theme of ‘Sustaining the Clean Energy Consensus; Empowering New Players’, WFES 2017 will bring together the world’s leading technology providers, government delegations, innovators and thought leaders in Abu Dhabi. Organisers expect around 880 companies from 40 countries and 38,000 attendees from 175 countries. That is a substantial increase on 2016, with around 600 companies and 32,000 attendees.
As WFES reaches its 10-year milestone, visitor numbers are around three times the figure for the first event in 2008. Mohamed Al Ramahi, CEO of Masdar, said: “Through the World Future Energy Summit, Masdar has helped to build an internationally respected platform that is sharing the knowledge, experience and investment necessary to make renewable energy and clean-tech adoption a commercial reality in the region today and in markets beyond.”
RE Government officials from more than 150 countries and leaders from international organisations, the private sector and civil society have gathered in Abu Dhabi for the seventh assembly of the International Renewable Energy Agency (Irena) to chart a path to a sustainable energy future.
The assembly, the agency’s ultimate decision-making authority, brings together the international community to advance the global renewable energy agenda, make concrete steps to accelerate the global energy transition and a decarbonisation of the global energy mix.
INFRASTRUCTURE DEVELOPMENT IN ABU DHABI
Abu Dhabi City Municipality (ADM) is currently constructing a number of projects including parks and playgrounds at Al Shamkha city and Al Adlah city, costing over Dh 127 million. The projects include renovating parks and maintaining landscaped areas in Abu Dhab Mainland, besides constructing water reservoirs, irrigation systems and modern pumping stations.
The projects will provide recreational facilities and parks in order to meet people’s aspirations and requirements under the development plan 2030 for Abu Dhabi and suburbs. ADM is currently undertaking infrastructure projects in the Mainland, costing Dh 127,870,000 million. These projects include constructing and restoring parks and playgrounds beyond Abu Dhabi Island besides improving irrigation network, reservoirs and pumping stations.
The projects also include restoring four parks at Al Shamkha, building a new one at Al Adlah, besides rehabilitating parks and carrying out landscaping works in the Mainland of Abu Dhabi city. The projects also comprise building multi-purpose sports courts for all age brackets, children’s playgrounds, barbeque areas and sitting areas surrounded by eye-catching aquatic sceneries and decorative lighting, in addition to the harmonious views of landscaped areas in a way consistent with the sustainability standards.