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Qatar Tries to Ease Food-Supply Fears As Crowds Throng Shops

Published on Jun 7 2017 8:00 AM in Retail tagged: Featured Post / Food / Qatar / Arab States

Qatar Tries to Ease Food-Supply Fears As Crowds Throng Shops

Qatar’s government sought to dispel concerns of possible food shortages a day after its biggest suppliers, Saudi Arabia and the United Arab Emirates, cut diplomatic and trade links with the import-dependent country.

Authorities have taken steps to ensure a regular supply of food and other goods, the Ministry of Economy and Commerce said in a video released on Tuesday that showed fully stocked supermarket shelves.

“There are abundant products in line with a government plan that is activated under such circumstances,” the video’s unidentified narrator said. “Prices are stable and will not be affected, especially that the prices of most consumer and food products have been fixed and any changes will require the ministry’s approval.”

Qatar, an arid country about the size of the U.S. state of Connecticut, relies heavily on imports to feed its 2.7 million people, most of them expatriates. Its ports and airports remained open to trade with countries not taking part in the Saudi-led boycott, the government said. Some 38 percent of Qatar’s food comes across the border from Saudi Arabia, Mazen Al-Sudairi, head of research at Al Rajhi Capital, a Riyadh-based financial services company, said Tuesday in a Bloomberg TV interview.

“We have no problem in food supply,” Qatar Foreign Minister Mohammed Al Thani told CNN. “We have strategic reserves in place since 2014, we don’t see that life will be affected. We have sea navigation and also air navigation and suppliers have been identified from different countries.”

Rice, Chicken

Shoppers on Monday night waited by the dozens in checkout lines at supermarkets in the capital, Doha, as people stocked up on rice, chicken and other staples.

“I’m concerned some products may be out of stock until suppliers find new sources,” Mohammed Saeed, an Egyptian engineer, said at a Carrefour SA grocery store in central Doha. “There are some packaged goods from Saudi, and as you can see many people are stocking up in those aisles.”

By Tuesday morning, stores were quieter, though shelves at one grocery outlet were empty of eggs from the U.A.E. and milk packaged by Saudi Arabia’s Almarai Co.

The U.A.E. and Saudi Arabia, together with Bahrain and Egypt, accuse Qatar of supporting extremist groups. The U.A.E. was the second-biggest source of imports into Qatar in the fourth quarter of 2016, while Saudi Arabia ranked eighth, according to data compiled by Bloomberg. Together, the two countries accounted for 15 percent of Qatari imports in the quarter, the data show.

The U.A.E. and Saudi Arabia are also Qatar’s two biggest food suppliers, according to the World Bank.

Both nations have stopped exporting white sugar to Qatar, ADM Investor Services International said in a report. “Qatar’s consumption is only around 100,000 tons a year, and they can source from elsewhere,” it said.

India and European countries will be quick to meet Qatar’s sugar needs, Yves El Mallat, chief executive officer of Bahrain’s Arabian Sugar Co., said Tuesday in a phone interview. “Qatar might suffer a bit, but I don’t think it will be for long,” he said.

Alternative Supplies

Only about 1 percent of Qatari land is used to grow crops, according to the United Nations’ Food & Agriculture Organization. The country has commissioned pilot projects to farm without soil, using hydroponics technology, and its $335 billion sovereign wealth fund owns rice, poultry, grain and livestock producers in Pakistan, Oman and Australia through its Hassad Food division.

One potential source of food imports is Saudi Arabia’s regional rival Iran, whose cordial relationship with Qatar contributed to the diplomatic dispute. Iran can ship food across the Gulf to reach Qatar in 12 hours, said Reza Nourani, the chairman of Iran’s food exporters’ union, according to the Fars news agency.

Even so, the opening of new supply routes could push food prices higher, causing pain for hundreds of thousands of migrant workers in Qatar, where the poorest such employees scrape by on 800 riyals ($219) a month. Shoppers at a Lulu hypermarket were loading up on essentials on Monday night.

“I came today because of the news,” said Martina, a 42-year-old office worker from the Philippines, who didn’t want to give her last name. “I need to buy before prices go up.”

News by Bloomberg, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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