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Asia’s Ginger Market 2019: UAE Is Expected to Be the Fastest-Growing Export Market

Asia’s Ginger Market 2019: UAE Is Expected to Be the Fastest-Growing Export Market

IndexBox has just published a new report: ‘Asia – Ginger – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The revenue of the ginger market in Asia amounted to $3.2B in 2018, rising by 14% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

In general, ginger consumption continues to indicate a prominent expansion. The growth pace was the most rapid in 2010, with an increase of 56% against the previous year. Over the period under review, the ginger market attained its peak figure level in 2018, and is expected to retain its growth in the near future.

Production in Asia

The ginger production amounted to 2.7M tonnes in 2018, surging by 6.9% against the previous year. The total output indicated a strong increase from 2008 to 2018: its volume increased at an average annual rate of +6.8% over the last decade. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, the ginger production increased by +93.7% against 2008 indices. The growth pace was the most rapid in 2011, with an increase of 24% against the previous year. The volume of ginger production peaked in 2018, and is likely to continue its growth in the near future. The general positive trend in terms of ginger output was largely conditioned by a strong growth of the harvested area and a modest increase in yield figures.

Imports in Asia

The imports amounted to 410K tonnes in 2018, going up by 4.4% against the previous year. The total import volume increased at an average annual rate of +3.3% over the period from 2008 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period.

In value terms, ginger imports stood at $385M (IndexBox estimates) in 2018.

Imports by Country

In 2018, Pakistan (93K tonnes), Japan (68K tonnes), the United Arab Emirates (47K tonnes), Malaysia (45K tonnes), Bangladesh (42K tonnes), Saudi Arabia (28K tonnes) and India (24K tonnes) represented the main importers of ginger in Asia, generating 85% of total import.

From 2008 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by the United Arab Emirates, while the other leaders experienced more modest paces of growth.

In value terms, Japan ($103M), Pakistan ($83M) and the United Arab Emirates ($42M) appeared to be the countries with the highest levels of imports in 2018, together accounting for 59% of total imports.

Import Prices by Country

In 2018, the ginger import price in Asia amounted to $939 per tonne, remaining stable against the previous year. The import price indicated a moderate growth from 2008 to 2018: its price increased at an average annual rate of +2.6% over the last decade. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2018 figures, the ginger import price increased by +25.2% against 2016 indices.

Import prices varied noticeably by the country of destination; the country with the highest import price was Japan ($1,513 per tonne), while Bangladesh ($279 per tonne) was amongst the lowest.

From 2008 to 2018, the most notable rate of growth in terms of import prices was attained by India, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

Margarine Market in the Middle East – Trends, Analysis and Forecast

IndexBox has just published a new report, the Middle East – Margarine And Shortening – Market Analysis, Forecast, Size, Trends and Insights. Here is a summary of the report’s key findings.

The revenue of the margarine and shortening market in Middle East amounted to $1.1B in 2017, growing by 11% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

The market value increased at an average annual rate of +2.8% from 2007 to 2017; the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The most prominent rate of growth was recorded in 2011, with an increase of 37% y-o-y. In that year, the margarine and shortening market attained its peak level of $1.4B. From 2012 to 2017, the growth of the margarine and shortening market remained at a somewhat lower figure.

Production in the Middle East

In 2017, approx. 837K tonnes of margarine and shortening were produced in Middle East; growing by 2.4% against the previous year. The margarine and shortening production continues to indicate a relatively flat trend pattern.

Exports in the Middle East

In 2017, exports of margarine and shortening in Middle East amounted to 165K tonnes, coming down by -22.4% against the previous year. Overall, the total exports indicated a modest expansion over the last decade, increasing at an average annual rate of +1.9% from 2007 to 2017. In value terms, margarine and shortening exports stood at $183M (IndexBox estimates) in 2017.

Exports by Country

Turkey prevails in margarine and shortening exports structure, recording 141K tonnes, which was approx. 85% of total exports in 2017. It was distantly followed by Oman (13K tonnes), achieving 7.6% share of total exports. The United Arab Emirates (7.1K tonnes) followed a long way behind the leaders.

Exports from Turkey increased at an average annual rate of +2.3% from 2007 to 2017. At the same time, Oman (+22.5%) displayed positive paces of growth. Moreover, Oman emerged as the fastest growing exporter in Middle East, with a CAGR of +22.5% from 2007-2017. By contrast, the United Arab Emirates (-5.4%) illustrated a downward trend over the same period. From 2007 to 2017, the share of the United Arab Emirates increased by 3.1% percentage points, while Oman (-6.6%) and Turkey (-17.6%) saw their share reduced.

In value terms, Turkey ($149M) remains the largest margarine and shortening supplier in Middle East, comprising 82% of global exports. The second position in the ranking was occupied by Oman ($15M), with a 8.1% share of global exports.

Export Prices by Country

The margarine and shortening export price in Middle East stood at $1.1 per kg in 2017, increasing by 7.4% against the previous year. The the margarine and shortening export price continues to indicate a relatively flat trend pattern.

Average export prices varied somewhat amongst the major exporting countries. In 2017, the country with the highest export price was the United Arab Emirates ($1.5 per kg), while Turkey ($1.1 per kg) was amongst the lowest.

From 2007 to 2017, the most notable rate of growth in terms of export prices was attained by the United Arab Emirates (+3.4% per year), while the other leaders experienced mixed trends in the export price figures.

Imports in the Middle East

In 2017, the amount of margarine and shortening imported in Middle East totaled 353K tonnes, waning by -5.1% against the previous year. The total imports indicated a remarkable increase from 2007 to 2017: its volume increased at an average annual rate of +5.9% over the last decade. In value terms, margarine and shortening imports totaled $411M (IndexBox estimates) in 2017.

Imports by Country

In 2017, Iraq (99K tonnes), distantly followed by Saudi Arabia (64K tonnes), Syrian Arab Republic (41K tonnes), Turkey (38K tonnes), Iran (32K tonnes), the United Arab Emirates (21K tonnes) and Lebanon (16K tonnes) were the key importers of margarine and shortening, together comprising 88% of total imports.

From 2007 to 2017, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Lebanon (+19.4% per year), while the other leaders experienced more modest paces of growth.

Import Prices by Country

In 2017, the margarine and shortening import price in Middle East amounted to $1.2 per kg, jumping by 4.7% against the previous year. Over the period from 2007 to 2017, it increased at an average annual rate of +1.3%.

Average import prices varied somewhat amongst the major importing countries. In 2017, major importing countries recorded the following import prices: in Turkey ($1.4 per kg) and the United Arab Emirates ($1.4 per kg), while Iraq ($965 per tonne) and Syrian Arab Republic ($1 per kg) were amongst the lowest.

From 2007 to 2017, the most notable rate of growth in terms of import prices was attained by the United Arab Emirates (+4.0% per year), while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

Dubai Customs Adds 5.7 million Captagon Pills to Seizure List in 2019

A combination of strategic planning, cooperation, a customs K-9 Dog unit, and smart inspection technology supported efforts to thwart an attempt to smuggle 5.715 million Captagon pills at Jebel Ali & Tecom Customs Center. Dubai Customs – also known for seizing an illegal shipment of 5 million Captagon pills back in January, confirmed this latest smuggling attempt utilized bags of red lentils to conceal the pills.

“We are vigilant and well prepared to all attempts of bringing these illegal contrabands into the UAE through Dubai entry points. The high sophisticated level that Dubai Customs reached in terms of infrastructure, equipment and the skills of their customs officers have led to more control over the emirate’s entry points and borders following the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai,” Director General of Dubai Customs Ahmed Mahboob Musabih said.

This seizure brings the total number of Captagon pills confiscated by Dubai Customs to 10.715 million pills in less than five months. The high-levels of communication and coordination between Jebel Ali & Tecom Customs Center and the Dubai Customs Intelligence Center serves as major factor for successful confiscations of illegal shipments. Jebel Ali & Tecom Customs Center’s one-of-a-kind container detection system provided the information needed for the final determination of risk involved with the illegal shipment.

“The full X-ray container detection system, the first of its kind in the world, can process 150 containers per hour,” Yousef Al Hashimi, Director of the Jebel Ali Customs Centres Management said. “These achievements at the Jebel Ali Customs Centre Management support our preparations for the upcoming Expo 2020. We have a very advanced smart risk engine in place which we developed in-house to track all coming shipments and classify them based on their risk level” he concluded.

How global traders in UAE Free Zones can avoid the new Value Added Tax

The recent imposition of a value-added tax (VAT) by the UAE raised concerns amongst global traders that the Gulf country was moving away from its traditional role of drawing in multinational investors, particularly those who use the region as a transfer hub for goods being re-exported to other destinations in the Middle East and beyond. The VAT would, after all, increase landed costs and in turn, generate a price spike for the end consumer, making products less competitive.

To ease investors’ fears, the UAE’s government has established a new, albeit complex, regime to allow global traders to continue to take advantage of the UAE’s traditional Free Trade Zones or FTZs where imports have not been traditionally subject to duties and taxes.

A Critical Region

The United Arab Emirates (UAE), by its location, has served as a centre for trade for centuries. In recent times, Free Trade Zones (FTZs) in the UAE have helped global enterprises to serve a market size of approximately two billion people who live within a four-hour flying distance from the UAE. The UAE’s considerable investments in FTZ infrastructure that support imports and re-exports through air, land and sea modes, have contributed in making the country a global logistics hub.

As with most FTZs, imported goods are not subject to import or export duties. Thus, goods meant for regional markets are imported in bulk into UAE FTZs from production facilities around the world and then redistributed after additional processing, packaging or having been broken down to market-determined transaction quantities. According to the UAE Central Bank, a total of $61.2 billion was exported from UAE FTZs in 2017, accounting for nearly 20 percent of the country’s exports that year.

Designated Free Zones

The new VAT regime implemented in 2018 applies a consumption tax on the supply of goods and services which take place within the territory of the UAE. Historically, FTZs have been considered outside the UAE territory for the application of import duty. However, for the purposes of VAT, the UAE has not extended a similar treatment to FTZs and they are deemed a part of the UAE territory for the purposes of VAT.

The UAE Cabinet has identified certain free trade zones, called Designated Zones, in which certain transactions are considered as being completed outside the UAE and, in turn, not subject to the VAT. However, businesses registered in Designated Zones have the same VAT obligations as non-Designated Zone businesses and must register, report and account for VAT under the VAT rules.

The Rules
Following are the main scenarios and the VAT treatment that applies to them from Designated Zones

Services rendered from within a Designated Zone to a UAE or Gulf Cooperation Council (GCC) consumer will have the VAT applied, while all services rendered to a consumer outside the GCC will not.

Goods sold within the Designated Zones are subject to VAT only if the goods are consumed within the same Designated Zone. If they are being purchased for the purposes of producing, modifying or forming a part of another good located in the same Designated Zone, they are not subject to the VAT.

Goods from outside the UAE to a Designated Zone are not subject to the VAT. However, it is expected that once VATs are applied by other GCC countries, goods entering UAE Designated Zones from those GCC countries will be subject to VAT.

Goods from within the UAE into Designated Zones are treated as being made in UAE territory and are not considered as an export from the UAE and, therefore, will be subject to the VAT.

A sale or movement of goods between Designated Zones will not have the VAT applied. However, the goods being transferred must not be released in whole or in part into domestic circulation during the transfer, and must not be used or altered in any way during the transfer between Designated Zones. The goods must also comply with the rules of Customs duty suspension (Goods in Transit) as per the Gulf Cooperation Council Common Customs Law.

Goods from Designated Zones to a buyer onshore in the UAE are subject to the VAT, because they are treated as an import into the UAE. It must also be noted that VAT could be charged again on a subsequent sale of the goods within the mainland if it is being made by a person subject to the VAT.

Goods in a Designated Zone on which VAT has not been paid and consumed by the owner of the goods will be treated as having been imported into the UAE and VAT will be applied accordingly.

The table below provides a high-level picture of the applicability of VAT on different types of transactions.

In short, with the introduction of Designated Zones, the UAE government has aimed to ensure that businesses based in these zones are not subject to VAT if the goods being traded are meant for markets outside the Gulf Cooperation Council countries.

JC Pachakkil is a senior consultant in Global Trade Management at trade services firm Livingston International.

Illicit Trade: The Fight Continues

The United Arab Emirates is the latest region of focus in the fight against illicit trade after the The Transnational Alliance to Combat Illicit Trade (TRACIT) asked for increased efforts this week during a conference in Abu Dhabi.

The conference, hosted by Global Trade Development Week, consisted of industry leaders analyzing the illicit trade vulnerabilities in the wake of increased trafficking in the region of Jebel Ali Free Trade Zone.

The United Arab Emirates currently ranks 34th globally with an overall rank of 68/100 for structural capability to effectively address illicit trade according to 2018 Global Illicit Trade Environment Index.

“I’m not surprised that UAE has scored in the top third of our global rankings,” TRACIT Director-General Jeffrey Hardy said. “The country has demonstrated its commitment to wiping out corruption, standing up against money laundering and strengthening laws to fight against counterfeiting and other forms of IP Theft.”

With successful initiatives to-date for the region, Hardy continues to adamantly encourage the region to combat illicit trade efforts through  improved customs operations, rationalizing tax policies and overall cleaner operations in Free Trade Zones.

“Strengthening cooperation with neighboring countries and working with international organizations like INTERPOL can rapidly improve UAE’s ability to defend against illicit trade,”  Hardy said. “Similarly, the government can shift public perception and understanding of the negative impacts of illicit trade by improving public awareness and education.”

Source: tracit.org

 

What corporations should know about operating in Abu Dhabi

Economists have long debated the effectiveness of laws enacted to spur economic development. But cities continue to try to create jobs and wealth, and some like Abu Dhabi seem to be doing something right.

The capital of the United Arab Emirates in 2015 created a financial district where it relaxed tax and regulatory requirements to attract foreign investment. In three years, the Abu Dhabi Global Market has emerged as a vibrant business community featuring financial services companies and professional advisers.

Writing laws conducive to growth has secured Abu Dhabi’s place as a global financial center. It’s ranked 25th in the Global Financial Centres Index, just behind better known European financial hubs Frankfurt, Luxembourg and Paris.

Governance and law in the Abu Dhabi Global Market was modeled after its UAE neighbor, Dubai. Using its newfound oil wealth in the 1970s, Dubai started upgrading its infrastructure to become a commercial center in the Middle East. The fundamentalism of Gulf Coast countries, though, was a deterrent to foreign investment in the Middle East. Leveraging a concept called “free zones,” Dubai developed economic areas that waived corporate taxes, allowed 100 percent foreign ownership and simplified start-up processes.

It took the idea a step further in 2004 by opening a free zone called the Dubai International Finance Centre with its own legal structure, financial regulator and courts. The DIFC, as it’s known, is governed by British common law rather than Sharia law. A transparent legal regime aligned with international best practices offered certainty and familiarity to global financial institutions and foreign investors.

The legal changes combined with business-friendly regulations, political stability and modern infrastructure have turned Dubai into a favored city for business in the Middle East and Africa. It’s also at the center of trade between the East and West, connecting the region to the economies of Europe, Asia and the Americas. The DIFC has a working population of more than 22,000 people and 2,000 companies, according to its website. It has attracted many of the world’s largest banks, as well as multinational corporations.

The DIFC now has healthy competition from within the UAE. Abu Dhabi seeks to exploit its oil wealth –estimated at 6 percent of the world’s proven oil reserves – to transform its economy and global competitiveness.

The Abu Dhabi Global Market is in the capital’s shiny new Al Maryah Island, a half square-mile piece of land being developed by Mubadala, one of the world’s largest sovereign wealth funds. Taking a page from the Disney corporate playbook, Abu Dhabi has carefully planned the growth and development of the island. The first phase was the financial district, a shopping mall, a luxury hotel and the world-class Cleveland Clinic hospital. Another shopping center, featuring department stores Macy’s and Bloomingdales, is expected to open later this year. Al Maryah is poised to become one of the world’s most luxurious neighborhoods.

The financial center, known as ADGM, is housed in glistening new towers and a low-lying central building shaped like an upside-down trapezoid. Like its Dubai counterpart, it has an independent financial services regulator and a court system built on English law.

The ADGM’s legal approach is more progressive than the DIFC’s by adopting specified English laws and related jurisprudence. It also reaches out to its community or to experienced advisers on new considerations or initiatives before launching white papers for public comment. This allows any new laws or regulations to be carefully considered, which is unique in the market.

The ADGM has also reduced the need for laborious notarization and legalization processes, which add time and significant cost for any new company entering the market or expanding. It is the only jurisdiction in the Middle East offering this.

While ADGM permits a range of financial services, from banking to insurance to wealth management, it has also launched several firsts in the region, including a private real estate investment trust regime, a new venture capital framework for fund managers and an aviation financing scheme.

The existence and interaction of federal laws, individual emirate laws and free zone laws can be quite complex and confusing, making it essential to seek out a local expert. For example, a foreigner wishing to conduct business outside the free zone must have a local partner owning 51 percent of the business. Other challenges include a small domestic market, risks of speculative bubbles, geopolitical instability in the Middle East and dependence on oil.

Foreign investment in Abu Dhabi and Dubai allowed the UAE to weather the slump in oil prices that began in 2014. UAE saw the inflows of foreign direct investment increase by nearly 8 percent last year, to $10.3 billion, according to the United Nations Conference on Trade and Development. In sharp contrast, inflows of foreign direct investment to the region, excluding Israel, fell by 16 percent in 2017.

The UAE’s favorable business climate, led by the ADGM, had a lot to do with that.

 

About Stephanie Williams:

Stephanie, who joined TMF Group in 2013, has been working in the Middle East for 10 years. She’s a specialist in business structuring and corporate governance, as well corporate secretarial services and communication. She has helped set up businesses in the UAE and has broad knowledge of the local complexities.

CH2M HILL Completes Middle East Airport Project

Englewood, CO – CH2M HILL, the global full-service consulting, design, construction, and operations firm, last week celebrated the opening of a new runway at the United Arab Emirates’ Sharjah International Airport.

The project, which consists of the main runway spanning 4,060 meters and a width of 60 meters, has two taxi ways and ten connecting corridors, which will secure the landing aircraft out of the main runway in the shortest time.

Also included were the implementation of a 15 km services road, and the construction of a security fence extending for 10 km, as well as implementation of the rain water drainage network.

Completed in two years using international aviation infrastructure experts, the runway is built to the highest international standards and allows for an increase in passenger and cargo capacity.

This new runway reinforces Sharjah International Airport’s role as a gateway to the Emirate of Sharjah and the United Arab Emirates.

The new runway will allow for unrestricted operations of the largest aircraft including Airbus A380, Boeing 747-800, and Antonov 124/225 type aircraft. Eight new link taxiways and two high-speed runway exits were constructed as part of the same project.

These additions will increase the connectivity between the runway, passenger terminal, and cargo aprons.

The new runway also equips Sharjah Airport with modern aeronautical lighting and airfield systems, which will increase safety standards and allow operations in reduced levels of visibility, allowing aircraft to land in foggy conditions.

The installed infrastructure has built-in allowances for equipment to be easily upgraded to allow operations in further reduced levels of visibility in the future.

Headquartered near Denver, Colorado, USA, employee-owned CH2M HILL is a consulting, design, design-build, operations and program management for government, civil, industrial and energy clients. The firm’s work is concentrated in the areas of water, transportation, environment, nuclear, energy, facilities and urban environments.

The firm has more than 26,000 employees worldwide and generated $6.6 billion in revenue in 2013.

11/18/2014