Food consumption in Oman to grow 4.6% annually until 2023: Report
Within the GCC, Oman is likely to witness the highest growth at a CAGR [compound annual growth rate] of 4.6 per cent in terms of food consumption which is anticipated to grow from 3.2mn MT in 2018 to 4.0mn MT in 2023, according to the GCC Food Industry Report published by Alpen Capital (ME) Limited, an investment banking advisory firm.
Population and real GDP growth of 3.2 per cent and 2.5 per cent respectively during the period will be a major factor driving the food consumption in the country.
Tourism will also play a key role in defining the upcoming food demand. It is expected that the tourist arrivals in Oman is likely to grow at a CAGR of 5.5 per cent between 2018 and 2023 to reach 3.3mn.
The government is initiating several growth intensive steps to promote tourism such as introduction of e-visa system, expansion and transformation of Muscat International Airport and establishing attractions by encouraging public private partnerships.
The recent commencement of production at the Khazzan tight gas field will be a boost to gas output and in turn government revenues, over the coming years.
This should result in a substantial uptick to the real GDP growth and thus improve the per capita income thereby lifting all sectors including food.
Among all food categories, dairy consumption is likely to grow fastest at 5.6 per cent during 2018 to 2023 followed by cereals at 5.5 per cent. Growth in dairy consumption can be attributed to changing food preferences of the people towards more healthy food. Rice and wheat, which form the core ingredients of staple diet, will drive the demand for cereals. To meet the growing demand for dairy, Oman Food Investment Holding Company’s (OFIC) flagship project, Mazoon Dairy is set to commence operation of its US$260mn facility in Q3 2019.
In the initial stages, the facility is targeting to produce 350,000lt of milk per day, which will be scaled up to 1mn lt on a daily basis within a ten-year period. Being the largest fish producer and exporter in the region, the Omani government is using several technology initiatives to boost local production which is likely to increase the consumption, thus contributing to the 5.4 per cent annualised consumption growth in the ‘Others’ category.
According to Alpen Capital report, food consumption in the GCC is expected to grow at a CAGR of 3.3 per cent from an estimated 51.5mn MT in 2018 to 60.7mn MT in 2023.