Wealthy Gulf states are facing their biggest food security challenge since the 2008 global food crisis, as the Iran conflict threatens ports and disrupts shipping through the Strait Of Hormuz
The war is testing strategies adopted after 2008, when soaring food prices prompted Gulf nations to shift toward import-dependent policies reliant on pouring cash into agricultural investments abroad.
That strategy did away with prior expensive programmes that sought to raise domestic production of strategic grains but ran up against the region's brutal climate and lack of water. Saudi Arabia, for example, began to scale back a domestic wheat-growing programme in 2008 to become almost exclusively reliant on imports.
Now with global shipping disrupted and airspace closed in many countries in a region that is 80%-90% dependent on food imports, price surges and scarcity of some goods are expected.
"With over 70% of GCC foodstuffs being imported through the Strait of Hormuz, Gulf states face shortages if the war persists," said Neil Quilliam, associate fellow at think tank Chatham House.
"While GCC countries have taken steps to diversify suppliers and ensure sufficient stores to withstand disruption, this can only last several months. At this point, price increases and longer lead times will start to hit the markets."
HORMUZ CHOKE POINT
Analysts warn that even temporary blockages in Hormuz that force rerouting from major ports to smaller ones will create strains.
Most major Gulf ports, including Dubai's Jebel Ali and primary ports in Kuwait, Bahrain, Qatar and the Saudi Gulf coast, are located where most incoming traffic would have to pass through the Hormuz waterway.
Iranian attacks struck many of those lifelines including Jebel Ali, the region's largest container port, this week, suspending operations for hours.
"The biggest immediate effect will be due to the blockade of Jebel Ali, serving about 50 million people," Ishan Bhanu, lead agricultural commodities analyst at Kpler, said about the Dubai port that also serves as a re-export hub to the region and beyond.
UAE ports outside the strait have limited capacity. Khorfakkan can handle 5 million twenty-foot equivalent units (TEUs) and Fujairah less than 1 million and would be hard-placed to make up for capacity lost at Jebel Ali or Abu Dhabi’s Khalifa Port.
"Qatar, Kuwait, Bahrain and Iraq effectively become landlocked and will depend on overland routes through Saudi Arabia," Bhanu added, warning of costly congestion.
'CRAZY' PRICE SPIKE ON BANANAS, OTHER PERISHABLES
Those bottlenecks are yet to show and the UAE has said its strategic reserves of vital goods cover four to six months of needs. It urged residents to report unjustified price increases through a dedicated hotline.
Supermarket staff told Reuters shelves remain largely stocked, though suppliers are taking longer to replenish certain products. Dubai this week temporarily relaxed truck-movement restrictions to maintain the flow of goods.
The start of Iran's strikes on the Gulf on Saturday prompted many to hoard and caused a temporary dip that further fueled panic, a dry run for what could come.
"It is worth noting that perception risk matters and even if stocks are sufficient now, public runs on supermarkets can spook the public," Quilliam said.
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