The number of factories operating in this area increased from 24 in 2003 to 37 in 2013. Due to Gulf’s lack of agricultural capacity, almost all of its oil is imported in the form of unrefined oil with refining largely done in the region. Limited domestic olive oil production happens in Saudi Arabia.
GCC’s oil refining capacity is dominated by Saudi Arabia [59.5%] followed by UAE [29.1%], Oman [9.5%], Kuwait [1.8%]. Qatar had only 500 tonne production capacity thanks to a single olive oil factory.
Edible oil consumption
|
Region |
% consumption of edible oil |
|
Saudi Arabia |
50.8% |
|
UAE |
24.4% |
|
Kuwait |
10.5% |
|
Oman |
7.9% |
|
Qatar |
4% |
|
Bahrain |
2.5% |
The manufacturers take care to ensure that the edible oils that are sold are manufactured with high quality of natural antioxidants and contain high level of minerals and vitamins. High nutritional value and taste have become unique selling points in the UAE edible oil market. Due to the onset of lifestyle diseases, consumers have become more health-conscious and the UAE government is also not sparing any effort to enhance the consciousness amongst the population regarding the ill effects of junk food and obesity associated with it.
Some manufacturers crush the oilseeds and sell the crude oil to refiners who further process it. Meal from seed crushing is used as major feed ingredient for poultry and cattle feeds industry. Let us look at some of the common edible oils sold in the UAE and their important characteristics. Soyabean oil is produced from soybeans by mechanical or solvent extraction. Crude soybean oil is further filtered or refined to produce salad and cooking oils. In the US, most of what is sold as “vegetable oil” in the stores is really pure soybean oil. In other countries, it is often labelled as soybean oil, or soya oil. It is the primary oil used in the food processing industry and is found in vegetable oil shortenings and margarine.
Soyabean oil is high in polyunsaturated fats, low in saturated fats, and a good source of linoleic and linolenic acids, the Omega-3 and Omega-6 fatty acids are also found in fish oils. Soyabean oil can be considered a healthy oil, provided that it’s not been hydrogenated and provided that it’s certified organic. All plant oils have different nutrient profiles, including the types of fat they contain. Soy oil would be especially helpful for a diet that was missing the essential Omega-6 fatty acid called linoleic acid (Soy oil is about 50% linoleic acid). It would also be helpful for a diet that needed more monounsaturated fat (soy oil is approximately 25% monounsaturated).
Palm oil is an important and versatile vegetable oil which is used as a raw material for both food and non-food industries. Obtained from the fruit (both the flesh and the kernel) of the oil palm tree, it contributes to the economic development of the producing countries and to the diets of millions of people around the world. In fact palm oil can be found in a huge percentage of every day supermarket products.
Oil palms are highly efficient oil producers, with each fruit containing about 50% oil. As a result they require 10 times less land than other oil-producing crops. Palm oil and palm kernel oil are entirely GM-free. Palm oil is used for food products, detergents, cosmetics and – increasingly – biofuel.
Global production of palm oil has doubled over the last decade. By 2000, palm oil was the most produced and traded vegetable oil (FAO 2002), accounting for 40% of all vegetable oils traded internationally. By 2006, the percentage had risen to 65%. Worldwide demand for palm oil is expected to double again by 2020. New plantations are being developed and existing ones are being expanded in Indonesia, Malaysia and other Asian countries, as well as in Africa and Latin America. But this expansion comes at the expense of tropical forest – which forms critical habitat for a large number of endangered species.
The sunflower is a distinctive, flowering plant (Helianthus annuus L), the seeds of which contain a valuable edible oil that contains more Vitamin E than any other vegetable oil. Most sunflower oil is used in food products. Sunflower seed is normally processed according to these steps:
○ Seed Preparation and cleaning
○ Dehulling
○ Physical pressing of the sunflower seed with subsequent hexane extraction of the remaining oil in the meal
○ Degumming
○ Refining
○ Bleaching
○ Dewaxing
○ Deodorisation
○ Storage
Edible oil industry in GCC countries is generally based on importing crude oils for refining, because oil seeds are not available locally, except for some efforts to extract sesame oils and olive presses that have been launched in the region recently after the expansion in olive cultivation, especially in Al-Jawf region in Saudi Arabia.
There is increased pressure on edible oil manufacturers to adopt manufacturing processes that are environment-friendly. With capacity increasing, the opportunities for exporting edible oils to Europe have increased. Consumer feedback and market research have helped the UAE edible oil industry to achieve a cost-quality trade-off. However the fact is that UAE edible oil market is still not self-sufficient and continues to rely on imports.
Although its population is just one-sixth of Saudi Arabia, the UAE buys as much vegetable oil as the GCC's largest country because much of what it imports is re-exported. UAE is the largest importer of palm oil from Malaysia.
Sustainable food self-sufficiency is unattainable for the countries of the Gulf Cooperation Council (GCC). Domestic production meets only a small proportion of needs, yet consumes significant economic resources and almost monopolises water use. GCC food security rests on international trade leaving countries exposed to price risk (due to volatility of import prices) and supply risk (relating to import disruption).
Key Market Restraints
Some of the key market restraints expected to significantly affect the edible oils market in the United Arab Emirates and Saudi Arabia are: ¦ Commodity price risk due to lack of local production and complete dependence on imports; ¦ Shortage of labour force in the sector.
GCC countries consume large quantities of vegetable and animal oils and fats as a result of the population growth and increase in standard of living and health awareness. GCC countries’ consumption of different types of oils and fats was estimated at more than 1.2 million tonne in 2013.
The status of the industry
A comprehensive overview of this industry in GCC countries shows that they rely on importing crude or semi-refined oil for refining. There are only a few olive presses mainly in Saudi Arabia, while vegetable and animal fats are mainly produced within dairy factories operating in GCC countries.
The palmolein is the most prevalent in the GCC region because of its relatively low price, and large Asian communities accustomed to it. Moreover, there is an increased consumption of other types such as sunflower, corn and olive oil. As for soybean oil, and in spite of its nutritional value, its consumption is still low because people are still not used to it.
Most vegetable oil producing companies in GCC countries, especially major corporations, attempted to adopt efficient marketing strategies. They have become widely known in the Gulf, other Arab markets and global markets as well. They continuously seek to adapt to the requirements and tastes of consumers which helps in increasing shares and boosting exports.
C o n c l u s i o n
The market for edible oils in the United Arab Emirates and Saudi Arabia is growing and likely to pick up again with a recovering economy. Due to technological advancements in reducing the trans-fatty acid content, the market for non-refined oils is likely to move toward market maturity. The introduction of new, healthy products is required to stimulate the market and help cope with changing consumer preferences. Besides, there is tremendous scope for the edible oils market largely due to increased industrial usage, especially in shipping and paint. Further, the local production of edible oils is very little due to adverse climatic conditions. The existing market participants need to increase their control over prices by investing in major edible-oil-producing countries such as Indonesia and Malaysia.
Besides the factors mentioned above, companies that want to succeed in the edible oils market need to invest in advertising and promotional activities for the promotion of their new low-fatty acid products. Awareness on health related issues has resulted in increased popularity of premium oils like Olive oils in the UAE edible oil market.
