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Gulf Food Stocks Dream Jolted by Practical Realities

Gulf Food Stocks Dream Jolted by Practical Realities

GCC strategic stockpile idea lives on; Regional rivalries question food sharing ideal

April 5, 2012 1:40 by

Gulf Cooperation Council (GCC) member states are considering building group emergency food stocks, amid threats by Iran to block their main supply route, but politics and practical hurdles could prove insurmountable, food security experts say.

Three of the GCC’s members – Bahrain, Kuwait, and Qatar – are almost entirely dependent on the narrow shipping lanes of the Strait of Hormuz for imported food supplies.

Although they have options outside the straits, the United Arab Emirates (UAE) andSaudi Arabia also import a large share of food and other consumer goods through ports in the Gulf, with only Oman’s food supplies unlikely to be unaffected by any disruption to shipping through Hormuz.

Iran has threatened to close the Strait of Hormuz, used for a third of the world’s seaborne oil trade, if western moves to ban Iranian crude exports cripple its lifeblood energy sector.

The GCC aims to improve coordination, integration and inter-connections between its six member states across all fields including trade, customs, scientific research and joint ventures.

Because of their reliance on one supply route to feed their booming populations, most GCC members have their own reserves but talk of a regional tie-up of stockpiles has been going on for years.

“This is one of the options we are looking into,” Abdullah al-Shibli, GCC assistant secretary general for economic affairs, told Reuters at a food security forum in Abu Dhabi.

The deputy executive secretary of the United Nations Economic and Social Commission for Western Asia (ESCWA), Nadim Khouri, said a regional system of stocks to meet around three months of consumption should work more effectively at times of crisis than separately managed stocks.

“This has been one element in an overall strategy that has been discussed for years,” Khouri said.

“At this point we are only discussing it at the technical level,” Khouri said.

The Khartoum-based Arab Authority for Agriculture Investment and Development (AAAID) said last month it was considering building 3-6 months worth of storage capacity in the GCC.

But the patchy history of cooperation between its members, with regional rivalries hindering energy sharing, does not bode well for plans to share food at times of crisis.

“What happens when a crisis erupts with each country trying to serve its own needs?” Raed Safadi, deputy director of the trade and agriculture directorate of the Organization for Economic Cooperation and Development (OECD), said.

“All this brotherly love will disappear,” he said.

Practical obstacles to a regional stocks system are also significant. Storage locations would have to be agreed on that are accessible to others, which is difficult given the long distances and very limited road or rail links between them.

The AAAID has said an ideal location for the reserves would be the port of Fujairahin the Gulf of Oman, a popular storage point for fuels because it lies outside the Strait of Hormuz.

From there, food might be easily distributed to the UAE and Oman which already have plenty of import options. But getting it to Kuwait, Qatar or Bahrain would mean driving to UAE ports on the Gulf coast and reloading onto cargo ships or driving supplies at least 600 km across the desert on the single major highway to the border with Saudi Arabia. From there it is about 500 km to Riyadh or Bahrain and 800 km to Kuwait.

An independent body to manage the reserves would also have to be set up with strict operating guidelines and a food price trigger level would have to be agreed by all for releasing stocks.

“Strategic food reserves are very important but they are not a remedy,” Eckart Woertz, a visiting fellow at Princeton University who studies issues in the Gulf said.

“They could help you to alleviate price spikes but in the long run you need to have a secure supply of food and that doesn’t come from storage.”

(Reporting by Maha El Dahan, editing by Daniel Fineren and Keiron Hender

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1 Comment

  1. Luka Beveridge on April 12, 2012 11:24 pm

    Thank you ever so for you article. Great.


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