Russia bush fire, Oz floods affect food imports

Food supply and food stocks in the region will remain tight for the rest of 2011 as the unexpected bush fire in Russia, flood in Australia and climatic problems in other producing countries have caused a shortage in the supply of wheat, said Essa Abdulla Al Ghurair, Chairman, Al Ghurair Foods, one of the world’s leading flour mill companies.

Speaking to Emirates 24|7, Al Ghurair said nobody can predict the food price trend in the future but wheat stock will be tight because nobody expected a bush fire in Russia that destroyed considerable quantity of wheat farms in Russia. Even though the UAE does not produce wheat or rice, Al Ghurair Foods has reached 50 countries around the world, procuring commodities from around the world and processing in its strategically located wheat and rice mills.

 “The bush fire in Russia and floods in Australia have caused the wheat supply situation very tight. Everybody is trying to store a bit more than their regular requirement and there is a psychological pressure to stock food crops,” Al Ghurair said at Gulfood, the largest food exhibition in the Middle East. He said the UAE Government is also creating a food safety reserve and Al Ghurair Foods is lending one of its food silos for the purpose.
 
The largest flour supplier in the Middle East has two flour mills in Dubai, flour mills in Algeria, Sudan, Lebanon and Sri Lanka together having an average daily milling capacity of 5,500 MT of wheat.  The company imports wheat from Australia, Canada and India. He said Al Ghurair Foods is building a new storage facility in Algeria port of Jinjin and will have a soya crushing plant there with 3,000 tons per day capacity.

Last year Russia witnessed the worst wild fire in 130 years. Russia is one of the world’s largest wheat producers, accounting for 8 per cent of global production. “The floods in Australia affected wheat growing areas and damaged some of the best wheat farms. The wheat from these farms have been downgraded to cattle feed due to floods,” Al Ghurair added.  Wheat price skyrocketed following the recent floods in Australia.

He said the recent political upheavals in the Middle East, especially Egypt, due to food shortage and high food price will not happen in any of the GCC countries because there is enough food supply in the market. “Whether food is not available or available at a higher or lower price is different. The UAE has a free market economy. When prices go up, people learn how to avoid wasting food. Instead of taking three cups of rice per day, people may reduce the rice intake to two cups. Such situation demands that consumers know how to carefully use the resources.”

Economic slowdown has not affected the demand for food products in the region: “Recession may affect markets for clothing, shoes or other items, but food is the last item that people will avoid. Nobody skips breakfast or lunch. In Dubai, the hotels and restaurant sector has not witnessed a major downfall in food purchase, because more foreign tourists coming to the city need food.”

The company also owns  Reem Rice Mill in Pakistan, making it a leading basmati rice exporter from Pakistan.  Al Ghurair said the company will open the first oats factory in Jebel Ali on Monday. “This is the first oats mill in the Middle East. Even in a huge country like India, there is no oats mill. It will have a milling capacity of 31,000 MT per annum and packing capacity of 20,000 MT (tin) and 16,000 MT (pouch) per annum. The Jenan brand oats will be available in Middle East North Africa market,” he added.

He added that there is nothing wrong in going for Genetically Modified Food, if proper testing is done in advance. “The way forward is to go for Genetically Modified Food, which will mean lesser use of fertilizers and pesticides.  However, we have to be careful with the GMO foods and there should be proper tests before pushing such products.”

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