Saudi Arabia Fruits and Vegetables Market - Analysis of consumption and production trends of Fruits and Vegetables (2018 - 2023)
The Saudi Arabian fruits market is expected to register a CAGR of 3.7% while the vegetables market in Saudi Arabia is expected to witness a CAGR of 3.3% during the forecast period. Dates and watermelons are the most widely produced fruits while potatoes and tomatoes are the most widely produced vegetables in Saudi Arabia. With regards to fruit, the main import sources were some countries in the region, including Egypt, Turkey, India, and also China, Chile and the US. For fresh vegetables, the primary import sources were Egypt, Jordan, the Netherlands, China, India and the US.
LACK OF DOMESTIC PRODUCTION DUE TO SCARCE WATER RESOURCES
The conditions in Saudi Arabia are unfavorable for the cultivation of most fruits and vegetables, with only 1.67% of arable land in the total land available. Saudi Arabia has the highest production of fruits and vegetables among all the GCC countries. The country was the largest producer in the GCC region, due to its favorable government policies for domestic production of fruits and vegetables. Due to the growing consumption of fruits and vegetables, Saudi Arabia tried to boost its agricultural output by increasing productivity so that nation could be self–sufficient. The country could not continue with this level of production due to the scarcity of water resources. This again increased the GCC countries’ reliance on import of fruits and vegetables. Due to the scarcity of water, the GCC countries’ domestic production can never satisfy its domestic consumption. To avoid complete reliance on fruits and vegetable imports the Saudi government has formulated policies that encourage farmers to grow crops that require low water, over crops that consume more water.
Agriculture accounts for 85% of the water consumption in the country. Most of the water utilised for the cultivation of fruits and vegetables is drawn from ground water resources and desalination plants. Water from these plants is highly subsidized; hence, the government plans to diversify the type of crops grown in the region to those that consume less water.
INVESTING IN FARM LAND ABROAD; A GOVERNMENT INITIATIVE
The Saudi government is encouraging agricultural companies to invest in foreign countries that have comparative advantage in producing certain crops and re-export their products back to Saudi Arabia. The crops targeted by this initiative include wheat, rice, barley, yellow corn, soybeans, and green forage. The Saudi government is providing financial incentives to encourage Saudi investors to take part in this food security initiative and invest overseas.
Key Developments in the Market
Saudi Arabia is facing a tough time in regulating its economy and hence, it is regularly imposing ban on import of various fruits and vegetables to, both ensure economic stability as well as to cater to domestic food security requirements.
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