Smart tech key to solving Middle East food security crisis

Smart tech key to solving Middle East food security crisis
Precision agriculture, soil health management, and improved water usage techniques are part of broader efforts to adapt to climate change and protect valuable resources. (SPA)
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Updated 15 December 2024
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Smart tech key to solving Middle East food security crisis

Smart tech key to solving Middle East food security crisis
  • Challenge of producing more food without further harming the environment intensifies

RIYADH: Increasing the use of smart technology in farming is critical if the Middle East is going to truly achieve food security, experts have told Arab News.

As agricultural productivity in the region remains vulnerable to supply chain disruption, water shortages, and conflicts, the challenge of producing more food without further harming the environment intensifies. 

Add in the consequences of climate change, and the Middle East needs to act fast — and smart — to ensure food security.

Vertical farms, increased use of data, and cross-country collaboration have all been flagged up to Arab News as key ways to tackle the short and long term challenges.

Abdel Rahman Al-Zubaidi, CEO of Ivvest, a Saudi-based agricultural technology and indoor farming company, emphasized to Arab News how his firm addresses these challenges: “Vertical farming allows exponential multiplication for the amount that can be produced in farms, enabling us to utilize vertical space and changing the way we design the production capacity from two dimensions to three dimensions.” 

He added: “This is essential for getting the best out of our limited arable lands in the Middle East, where, for instance, Saudi Arabia’s arable land was just 1.6 percent in 2021.” Available in Saudi Arabia, Ivvest’s farming “Capsule,” is a smart container farming unit empowered with IvvestOS, an operating system that brings intelligence to the facility. Using this technology, farmers can produce more than 200 plants per sq. meter, all year long, without pesticides, and while consuming 90 percent less water and land, according to the company.

Sanjay Borkar, CEO and co-founder of FarmERP, talked up the importance of innovation in an interview with Arab News, stating: “Tools like drones, sensors, and data analytics — key components of precision agriculture — help farmers and agribusiness use resources wisely. By monitoring things like soil health and water levels in real-time, farmers can fine-tune the use of water, fertilizers, and other inputs, minimizing waste and maximizing yields.” Precision agriculture, soil health management, and improved water usage techniques are part of broader efforts to adapt to climate change and protect valuable resources.Many countries are adopting climate-smart agriculture, which integrates sustainable practices that improve resilience to environmental stressors while mitigating greenhouse gas emissions.

Water scarcity: A crisis across the region

Water scarcity is perhaps the most pressing environmental issue across the Middle East. Jordan is one of the countries most affected, facing severe water stress due to the combination of traditional irrigation methods and over-reliance on depleted water resources. The UN Food and Agriculture Organization and other international organizations are promoting precision agriculture techniques, such as drip irrigation and soil moisture sensors, to enhance water use efficiency and reduce wastage. 

Vertical farming allows exponential multiplication for the amount that can be produced in farms.

Abdel Rahman Al-Zubaidi, CEO of Ivvest

Ivvest’s Al-Zubaidi explained that “indoor farming isolates the farming environment from the outside, ensuring optimal conditions for crops and reducing water loss from evaporation.” 

He noted that these methods drastically reduce the need for pesticides, further increasing sustainability.

Conflict-driven food insecurity 

While water scarcity is a severe concern, the Middle East’s food security crisis is also driven by conflict.

In correspondence with Arab News, the FAO said: “The ongoing war in Gaza has significantly exacerbated food insecurity in the broader NENA (Near East and North Africa) region by intensifying the already dire humanitarian crisis.”

The organization revealed that this conflict has disrupted supply chains, with the latest reports indicating that 95 percent of Gaza’s population faces high levels of food insecurity and nearly 343,000 people are at catastrophic risk of famine.

Local initiatives, such as urban farming and community-supported agriculture, have provided some relief to conflict-affected populations.

The impact of the Russia-Ukraine war

The global grain market has been severely impacted by the Russia-Ukraine war, with the Middle East feeling the effects more acutely than other regions. Countries including Egypt, Lebanon, and Yemen, heavily reliant on imports from these two major grain producers, are grappling with shortages.

As the conflict continues, food prices have soared, compounding the challenges faced by already vulnerable populations. The FAO’s call for investment in domestic agricultural production and the adoption of sustainable farming practices is particularly relevant for these nations.

The FAO said that hunger in Arab countries reached 59.8 million people in 2022, a 75.9 percent increase since 2000, accounting for 12.9 percent of the population compared to the global average of 9.2 percent. 

Tools like drones, sensors, and data analytics — key components of precision agriculture — help farmers and agribusiness use resources wisely.

Sanjay Borkar, CEO and co-founder of FarmERP

Al-Zubaidi addressed how Ivvest can contribute to the region’s food security: “Our technology development started after a failed project with greenhouses, which ignited thorough research. We found that traditional greenhouses, while helpful, are resource-intensive and inefficient in hot climates like ours.” 

He pointed out: “To overcome these risks, we designed and manufactured a full end-to-end indoor farming solution.” Ivvest’s vertical farming system allows producing over 240 plants per square meter, drastically enhancing productivity compared to greenhouses.

Zulfiqar Hamadani, CEO of Tanmiah Food Co., echoed the importance of local production, noting that “we must prioritize sustainable local production and develop resilient supply chains to ensure that we can meet the nutritional needs of our growing population.” 

He highlighted Tanmiah’s commitment to Saudi Arabia’s Vision 2030 food self-sufficiency goals, adding: “Saudi Arabia is taking major steps, including significant investments aimed at enhancing food security and fostering innovation in food production.”

Phil Webster, partner at Arthur D. Little, told Arab News that the greatest adaptation going forward will occur in the areas of agriculture that are growing the most, receiving the largest investments, and offering the greatest overall potential for IoT usage.

“These would be the poultry and aquaculture sectors, the latter of which I gather has grown 183 percent over the last 5 years,” he said.

Webster expected some potential developments in the Kingdom: “Make Saudi Arabia self-sufficient or even a net exporter in more food products, to transform agricultural supply chains through a wholesale shift toward alternative protein, or enabling semi or fully automated indoor or covered farming to maximize productivity and reduce the cost of agricultural production.”

Innovative solutions: a path to resilience

In response to these growing challenges, several countries in the Middle East are investing in innovative agricultural solutions. The FAO emphasized to Arab News the importance of “sustainable and resilient farming practices, including soil and water conservation, waste reduction, and the implementation of nature-based solutions.”

Al-Zubaidi added that the key to sustainability in farming lies in integrating innovations into the broader supply chain. 

Hamadani pointed out that the Middle East must “invest in innovative agricultural technologies such as precision farming, which optimizes resource use and minimizes waste.” He also emphasized the importance of sustainable practices that enhance soil health and water conservation.

Collaboration for a sustainable future

The FAO emphasized that collaboration between regional governments, international organizations, and local communities is crucial for building resilient food systems.

“Promoting climate-smart agriculture, such as diversified cropping systems and sustainable pest management, is crucial for enhancing agricultural resilience,” said the organization.

Al-Zubaidi added that the importance of partnerships between technology providers, distributors, and governments in achieving food security, describing them as “essential for creating a robust and sustainable food security framework.”

Hamadani also stressed the need for government support, noting that “clear policy frameworks that encourage research and development, alongside financial incentives for sustainable practices, are crucial.” He advocated for policies that support sustainable agricultural practices and reduce barriers for startups.

Borkar further elaborated, saying: “Collaborative partnerships between governments, tech companies, and local farmers are essential to share knowledge and ensure technology is accessible.” Grassroots initiatives like urban farming and water-efficient farming techniques can also empower communities and reduce their vulnerability to external shocks.

Partnerships and collaborations play a critical role in promoting the adoption and maintenance of digital technologies in agriculture, according to Webster. “The most important role of such collaborations is to ensure that there is good governance over the data that is collected at all parts of the food chain from farm to fork,” he added.


Oil Updates — crude set for 3rd straight weekly gain on winter fuel demand

Oil Updates — crude set for 3rd straight weekly gain on winter fuel demand
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Oil Updates — crude set for 3rd straight weekly gain on winter fuel demand

Oil Updates — crude set for 3rd straight weekly gain on winter fuel demand

LONDON: Oil prices rose in early Asian trade and were on track for a third straight week of gains with icy conditions in parts of the US and Europe driving up fuel demand for heating.

Brent crude futures climbed 40 cents, or 0.5 percent, to $77.32 a barrel at 9:02 a.m. Saudi time. US West Texas Intermediate crude futures gained 38 cents, also 0.5 percent, to $74.30.

Over the three weeks ending Jan. 10, Brent has advanced 6 percent while WTI has jumped 7 percent.

Analysts at JPMorgan attributed the gains to growing concern over supply disruptions due to tightening sanctions, amid low oil stockpiles, freezing temperatures in many parts of the US and Europe and improving sentiment regarding China’s stimulus measures.

The US weather bureau expects central and eastern parts of the country to experience below-average temperatures. Many regions in Europe have also been hit by extreme cold and will likely continue to experience a colder-than-usual start to the year, which JPMorgan analysts expect to boost demand.

“We anticipate a significant year-over-year increase in global oil demand of 1.6 million barrels a day in the first quarter of 2025, primarily boosted by ... demand for heating oil, kerosene, and LPG,” JPMorgan said in a note on Friday.

Meanwhile, the premium of the front-month Brent contract over the six-month contract reached its widest since August this week, potentially indicating supply tightness at a time of rising demand.

Oil prices have rallied despite the US dollar strengthening for six straight weeks. A stronger dollar typically weighs on prices, as it makes purchases of crude expensive outside the US.

Supplies could be further hit as US President Joe Biden is expected to announce new sanctions targeting Russia’s economy this week in a bid to bolster Ukraine’s war effort against Moscow before President-elect Donald Trump takes office on Jan. 20. A key target of sanctions so far has been Russia’s oil industry.

“Uncertainty over how hawkish Trump will be with Iran will be providing some support. Asian buyers have already been looking for alternative grades from the Middle East, with broader sanctions against Russia and Iran making this oil flow more difficult,” ING analysts said in a note on Friday.


SABIC, Almarai, SEC able to absorb fuel price hike: S&P Global

SABIC, Almarai, SEC able to absorb fuel price hike: S&P Global
Updated 09 January 2025
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SABIC, Almarai, SEC able to absorb fuel price hike: S&P Global

SABIC, Almarai, SEC able to absorb fuel price hike: S&P Global

RIYADH: Major Saudi companies, including chemical company SABIC, dairy firm Almarai, and Saudi Electric Co., are well-positioned to handle the impact of higher fuel and feedstock prices introduced on Jan. 1, according to a new report.

Released by capital market economy firm S&P Global, the analysis reveals that those corporates will be able to absorb the marginal increase in production costs by further improving operational efficiencies as well as potentially via pass-through mechanisms.

This came after Saudi Aramco increased diesel prices in the Kingdom to SR1.66 ($0.44) per liter, effective Jan. 1, marking a 44.3 percent rise compared to the start of 2024. The company has kept gasoline prices unchanged, with Gasoline 91 priced at SR2.18 per liter and Gasoline 93 at SR2.33 per liter.

Despite the hike, diesel prices in Saudi Arabia remain lower than those in many neighboring Arab countries. In the UAE and Qatar, a liter of diesel is priced at $0.73 and $0.56, respectively, while in Bahrain and Kuwait, it costs $0.42 and $0.39 per liter.

“For SABIC and Almarai, the increase in feedstock prices will not affect profitability significantly. In the case of utility company, SEC, additional support will likely come from the government if needed,” the report said.

The capital market economy firm projects that SABIC will continue to outperform global peers on profitability.

“We don’t expect the rise in feedstock and fuel prices to materially affect profitability, since the company estimates it will increase its cost of sales by only 0.2 percent,” the report said.

It further highlighted that SABIC is considered a government-related entity with a high possibility of receiving support when needed.

The report also underlines that Almarai anticipates an additional SR200 million in costs for 2025, driven by higher fuel prices and the indirect effects of increased expenses across other areas of its supply chain.

“We believe Almarai will continue focusing on business efficiency, cost optimization, and other initiatives to mitigate these impacts,” the release stressed.

With regards to SEC, S&P said that an unrestricted and uncapped balancing account provides a mechanism for government support, including related to the higher fuel costs.

“We believe any increased fuel cost will be covered by this balancing account,” the report said.

The study further highlights that the marginal increase “could significantly affect wider Saudi corporations’ profit margins and competitiveness.”

The S&P data also suggests that additional costs will be reflected in companies’ financials from the first quarter of 2025.

“Saudi Arabia is continuing its significant and rapid transformation under the country’s Vision 2030 program. We expect an acceleration of investments to diversify the Saudi economy away from its reliance on the upstream hydrocarbon sector,” the report said.

“The sheer scale of projects — estimated at more than $1 trillion in total — suggests large funding requirements. Higher feedstock and fuel prices would help reduce subsidy costs for the government, with those savings potentially redeployed to Vision 2030 projects,” it added.


Lenovo to produce ‘Saudi Made’ PCs by 2026 following $2bn Alat deal closure

Lenovo to produce ‘Saudi Made’ PCs by 2026 following $2bn Alat deal closure
Updated 09 January 2025
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Lenovo to produce ‘Saudi Made’ PCs by 2026 following $2bn Alat deal closure

Lenovo to produce ‘Saudi Made’ PCs by 2026 following $2bn Alat deal closure

RIYADH: Chinese tech giant Lenovo is set to manufacture millions of computer devices in Saudi Arabia by 2026, following the completion of a $2 billion investment deal with Alat, a subsidiary of the Public Investment Fund. 

First announced in May, the partnership has now received shareholder and regulatory approvals, paving the way for Lenovo to establish a regional headquarters and a manufacturing facility in the Kingdom. 

The deal marks a significant step in aligning Lenovo’s growth ambitions with Saudi Arabia’s Vision 2030 goals of economic diversification, innovation, and job creation, the company said in a press release. 

The factory will manufacture millions of PCs and servers every year using local research and development teams for fully end-to-end “Saudi Made” products and is expected to begin production by 2026, it added. 

“Through this powerful strategic collaboration and investment, Lenovo will have significant resources and financial flexibility to further accelerate our transformation and grow our business by capitalizing on the incredible growth momentum in KSA and the wider MEA region,” Yang said. 

He added: “We are excited to have Alat as our long-term strategic partner and are confident that our world-class supply chain, technology, and manufacturing capabilities will benefit KSA as it drives its Vision 2030 goals of economic diversification, industrial development, innovation, and job creation.” 

Amit Midha, CEO of Alat, underscored the significance of the partnership for both Lenovo and the Kingdom. 

“We are incredibly proud to become a strategic investor in Lenovo and partner with them on their continued journey as a leading global technology company,” said Midha. 

“With the establishment of a regional headquarters in Riyadh and a world-class manufacturing hub, powered by clean energy, in the Kingdom of Saudi Arabia, we expect the Lenovo team to further their potential across the MEA region,” he added. 

The partnership is expected to generate thousands of jobs, strengthen the region’s technological infrastructure, and attract further investment into the Middle East and Africa, according to the press release. 

In May, Lenovo raised $1.15 billion through the issuance of warrants to support its future growth plans. The initiative, which was fully subscribed by investors, signals confidence in Lenovo’s strategic approach and its plans for global expansion. 

The investment deal was advised by Citi and Cleary Gottlieb Steen & Hamilton for Lenovo, while Morgan Stanley and Latham & Watkins represented Alat. 


Lebanon’s bonds climb as parliament elects first president since 2022

Lebanon’s bonds climb as parliament elects first president since 2022
Updated 09 January 2025
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Lebanon’s bonds climb as parliament elects first president since 2022

Lebanon’s bonds climb as parliament elects first president since 2022

LONDON: Lebanon’s government bonds extended a three-month long rally on Thursday as its parliament voted in a new head of state for the crisis-ravaged country for the first time since 2022.

Lebanese lawmakers elected army chief Joseph Aoun as president. It came after the failure of 12 previous attempts to pick a president and the move boosts hopes that Lebanon might finally be able to start addressing its dire economic woes.

Lebanon’s battered bonds have almost trebled in value since September when the regional conflict with Israel weakened Lebanese armed group Hezbollah, long viewed as an obstacle to overcoming the country’s political paralysis.

Most of Lebanon’s international bonds, which have been in default since 2020, rallied after Aoun’s victory was announced to stand between 0.8 and 0.9 cents higher on the day and at nearly 16 cents on the dollar.

They have also risen almost every day since late December, although they remain some of the lowest priced government bonds in the world, reflecting the scale of Lebanon’s difficulties.

With its economy still reeling from a devastating financial collapse in 2019, Lebanon is in dire need of international support to rebuild from the war, which the World Bank estimates to have cost the country $8.5 billion.

 


Closing Bell: Saudi main index closes in green at 12,097

Closing Bell: Saudi main index closes in green at 12,097
Updated 09 January 2025
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Closing Bell: Saudi main index closes in green at 12,097

Closing Bell: Saudi main index closes in green at 12,097

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Thursday, gaining 9.01 points, or 0.07 percent, to close at 12,097.75. 

The total trading turnover of the benchmark index was SR7.48 billion ($1.99 billion), as 96 stocks advanced, while 133 retreated.    

The MSCI Tadawul Index decreased by 3.28 points, or 0.22 percent, to close at 1,510.14. 

The Kingdom’s parallel market, Nomu, surged, gaining 251.24 points, or 0.82 percent, to close at 31,027.39. This comes as 56 of the listed stocks advanced, while 32 declined. 

The best-performing stock was Nice One Beauty Digital Marketing Co. for the second day in a row, with its share price increasing by 7.69 percent to SR49. 

Other top performers included Fawaz Abdulaziz Alhokair Co., which saw its share price rise by 6.5 percent to SR14.74, and Abdullah Saad Mohammed Abo Moati for Bookstores Co., which saw a 4.42 percent increase to SR35.45. 

Arabian Pipes Co. and Dr. Sulaiman Al Habib Medical Services Group also saw positive change with their share prices moving up by 4.10 percent and 3.89 percent to SR12.70 and SR298.80, respectively. 

The worst performer of the day was Salama Cooperative Insurance Co., whose share price fell by 5.88 percent to SR19.52. 

Almoosa Health Co. and Al Hassan Ghazi Ibrahim Shaker Co. also saw declines, with their shares dropping by 5.13 percent and 3.91 percent to SR133.20 and SR28.25, respectively.   

On the announcements front, Riyad Bank declared its intention to fully redeem its $1.5 billion fixed-rate reset tier 2 sukuk, issued in February 2020, on Feb. 25, 2025.  

According to a Tadawul statement, the sukuk originally maturing in 2030, will be redeemed at face value in accordance with the terms and conditions. The redemption, approved by the regulators, will include any accrued but unpaid periodic distributions.  

On the redemption date, Riyad Sukuk Limited will deposit the full amount into the accounts of sukuk holders, marking the completion of the issuance. This redemption will conclude the sukuk’s life, with no remaining value post-redemption. 

Riyad Bank ended today’s trading session edging up by 0.91 percent to SR27.85.