The Arab Authority for Agricultural Investment and Development (AAID) is considering building a system for storing three to six months of grain reserves for the Gulf region, a senior official from the investment bank said Feb. 22.
AAID, which was set up by Arab governments in the late 1970s, will study construction of storage for Gulf Cooperation Council (GCC) countries, Al-Arabi Hamdi, adviser to the president for economic affairs for AAID, told Reuters.
“It will be most likely in the United Arab Emirates as the Fujairah port is close to the Strait of Hormuz and close to ports and the shipping world,” said Hamdi on the sidelines of a grains conference in Dubai. “We can build silos there and import and export grains,” he said.
The port of Fujairah in the Gulf of Oman is a popular storage point, because it lies outside the Strait of Hormuz, which Iran has threatened to block on several occasions over the last few months, but close to busy shipping lanes in and out of the Gulf.
If the AAID decides to go ahead at the end of the study, which could be completed by year-end, private investors will be invited to invest in the project, Hamdi said.
Land purchases elsewhere
AAID is also setting up an agricultural land investment company, in conjunction with Saudi investors, to buy land in the Middle East and farther afield, he said.
The company, which will start with capital of US$60 million, has identified Egypt, Sudan and Kazakhstan as potential places for buying land.
“The company that is being set up will market the grains within the Arab world,” Hamdi said.
Oil-exporting Gulf states have been investing in farmland overseas to help secure supplies of food for a region where fresh water is scarce.
AAID sees potential for growing wheat, oilseeds and potatoes in Egypt, where the Nile River offers a long backbone of fertile land in an otherwise arid region.
The AAID, headquartered in Khartoum, is also studying a proposal from the Mauritanian government to build a 60,000-tonne-per-year sugar factory, Hamdi said.
GCC members include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates.