Dubai Multi Commodities Centre (DMCC) has launched a new industry group, aimed at growing the country’s food trade industry and strengthening the region as a hub for global trade.
DMCC’s Food Trade Group (FTG) will work as a platform bringing together companies across the global value chain, from food traders and producers to service providers and financiers. Ahead of the launch this month, FTG has signed up more than 50 trading organisations, including Olam Group, Hakan Agro, Asia and Africa General Trading.
FTG will among other things provide a mediation service to resolve disputes between food traders and financiers, as well as business development and networking events. It will also give discounted access to training, insurance and other professional and financial services, the DMCC says.
“Through the group we are trying to build trust and collaboration in the industry,” DMCC’s director of commodity services, Franco Bosoni, tells GTR. “The food industry is quite well-established in Dubai, but in the last few years the competition has increased, opening the way for new growth opportunities in the market.”
DMCC, a government-owned organisation to promote trade, has over 12,700 registered member companies, of which 8% are engaged in the food industry. The FTG initiative comes in direct response to the needs of its members, Bosoni says, at the recommendation of a trade advisory group set up by DMCC over a year ago.
Bosoni adds that one of the elements of FTG will be to work with financial institutions and financiers to secure its members easier access to finance.
“Liquidity hasn’t been the same in the market in the last year and a half or so,” he says. “Trade finance is always a relationship between the traders and their financial institutions, but through this group we are hoping to provide tools that create trust and help expose companies to greater opportunities in terms of accessing trade finance.”
Bosoni emphasises the business-friendly infrastructure as one of the reasons that food trade companies are establishing in Dubai, and making the Emirate an important hub for international food trade. While FTG has its roots in Dubai, DMCC aims at attracting more international companies looking to engage with the region.
“90% of food consumption in the Gulf Cooperation Council relies on imports, so there’s a lot of trade that is already happening through the region for local consumption. Similarly Dubai has become a very big and significant re-export centre. The food is not just coming for the purposes of import and consumption, but for the purposes of preparation, value addition and then redistribution to the rest of the world,” he says.
Food trade in Dubai reached almost AED20bn (US$ 5.5bn) last year, according to the DMCC.