The Gulf Cooperation Council (GCC) includes Qatar, Saudi Arabia, United Arab Emirates, Kuwait, Oman and Bahrain. The country names themselves suggest real wealth, with significant potential for food imports.

The first thing that hits you on arrival in the Gulf is the heat. It is dry and arid, with only 1-2% of the land arable. Summer temperatures frequently exceed 45oC.

The region is fuelled by riches beneath the ground, in the form of some of the world’s largest oil and gas reserves. The fruits of that resource are to be seen in the rapid economic growth, major infrastructure investment and staggering wealth in the hands of the rulers who control the assets.

For Ireland, this is a food market of immense promise. We are a natural fit. We export 85-90% of our food, while they import 80-90% of their food to meet their needs. Unlike other new markets, such as China, this region has a good refrigerated food distribution network. It is also highly urbanised – generally over 85%.

As well as a strong economic expansion of 4-6% per year, the region is also characterised by significant population growth. At the turn of the century there were 28.5m people living in the GCC region. By 2010, this had jumped to 44.5m, a 56% increase in one decade. This combination of population and economic growth adds to the potential of the market.

Water scarce / fuel cheap

I travelled two hours by road east from Abu Dhabi and also an hour south from Riyadh in Saudi Arabia. The countryside was quite bleak, especially in Saudi. There were few major towns and very little to see apart from desert sand, occasional settlements, some crops of dates and some camel farms.

Water is a massive constraint in the GCC countries. In the case of Saudi Arabia, up to half of the town and city water is sourced from the sea and desalinated. This is a high-cost operation in itself and then the water has to be piped and pumped – 200 miles to the capital Riyadh for example.

Of course, the region’s low energy prices are a huge help – at least for now. The farms that I visited paid just 8c/l for diesel, but they had to haul their alfalfa hay from 1,000km away in the north. They were also importing alfalfa hay from Spain and the Ukraine. This background cost presents a massive opportunity for Ireland.

Spending power

In the Gulf region, food imports are essential. In order to feed their people, Governments in the region are striving to ensure that they have a secure supply of high quality food at an affordable price. While oil generates wealth, not everyone has access to that money.

For example, average consumer spending per capita in the United Arab Emirates is just €2,844. Accordingly, it is a price-sensitive region. In the case of dairy, this often requires the replacement of dairy fat with cheaper vegetable fat in order to deliver the required price point. Ireland can and does supply this market.

Saudi Arabian companies, such as Almarai, are investing overseas in order to secure food supply, with land acquired in Argentina and the Ukraine in the past three years. With Irish roots, Almarai is the largest integrated dairy business in the world, producing one billion litres of fresh milk in the Saudi Arabian desert. However, it needs additional ingredients for cheese, yogurt and infant nutrition products. It currently sources some dairy ingredients in Ireland. It has stated an interest in a European investment, but Ireland is just one of its options.

For Irish farmers and processors, the message is clear. There are customers for Irish food in the Gulf region, but the price and quality must fit their needs. My overall impression is that efficient Irish food producers can look to the future with confidence.