Middle East's Reliable Market

If you are a U.S. exporter of dried goods or beverages…thank the Middle East for its reliability in tough times. And I am not even talking about the toll the pandemic has taken on supplier's bottom line. When the trade wars really began to heat up around 2017, suppliers who exported a large percentage of U.S. food products were on the front line of the retaliatory strikes between China and the U.S. It could be said that U.S. dried foods category were used spearhead to impose punitive tariffs as response to China's increases.

Many of the companies who The American Exporter Magazine deals with regarding trade news and advertising are dried and processed food companies. I can tell you firsthand that some of the dried fruit and nut companies saw an 80% decrease in exports to China within the first year of the trade war! This was absolutely devastating, and drastic measures had to be taken to recover at least a small portion of that lost business. Enter the Middle Eastern marketplace. Do not get me wrong…the Middle East has been a reliable export region for years. I know companies who exclusively export to the Middle East. But for other suppliers...it was an area that was minute compared to China. Companies that I never saw attend expos like Gulfood were no appearing. I spoke with a few California nut suppliers who never went on trade missions to the Middle East, took a new interest. To simply put it…Middle Eastern importing saved a number of suppliers who were "China Heavy".

The numbers bear that out. Let us look at the United Arab Emirates and the increase in exports of U.S. consumer ready food products. These numbers encompass the year-to-year increase of exports between 2018 and 2019. This period is right in the middle of the US/China trade wars. U.S. exports of consumer ready food products totaled US$936.5 million in 2020, an increase of 20% from 2019. The UAE is the largest U.S. consumer food export market in the Middle East and the 20th largest overall. The UAE also imported US$424.6 million of U.S. processed foods in 2019, an increase of 6%. The UAE is the 2nd largest U.S. export market for processed foods in the Middle East after Saudi Arabia. The top three products are food preparations, snack foods, and processed and prepared dairy products.*

For industries like rice, nuts and grain not mentioned on this list…much of these products are shipped in bulk and added to things like snack foods as a food ingredient. Dried and processed food products rule the US export supply chain to the Middle East. However, let us not overlook the retail and food service arena. Areas like the UAE have seen tremendous growth and there are no signs of it slowing down. Euromonitor estimates 2021 retail sales in the UAE packaged food market was around US$5.7 billion. That represents an increase of 23.7% and nearly US$1 billion from 2017! They also forecast sales of packaged food in the UAE market to reach nearly US$7.4 billion by 2024, an increase of US$1.4 billion and 23.7 %.*

Even with the pandemic raging for the last 2 years, imports to Middle East have continue to grow. For some US suppliers (and industries), exporting to the Middle East has become their main market whereas China not so long ago held that mantel. Furthermore, places like Dubai and Abu Dhabi are seeing explosive population growth as well as higher standard of living. Abu Dhabi and Dubai together account for about 80% of the UAE's income. According to Euromonitor, Abu Dhabi's diversification program has made impressive progress. Its non-oil industries now account for close to 50% of GDP. The UAE is the second largest foreign direct investment (FDI) recipient among Arab countries after Saudi Arabia. As the UAE's economy has developed into a major services hub in the Middle East, its dependency on oil exports has declined.*

With that said, I do believe that the Middle East and more specifically the UAE have a strong future for the US supplier. The opportunities to export are limitless and the demand for US food products is only growing. The Middle East is a large region and for years was somewhat closed to the US food supplier. We can honestly say now that in a world of pandemic and trade wars, it has emerged as a solid and reliable trade region. And with that I will see you in Dubai 2023 and The Natural Products Expo in Anaheim in March!!