A recent research from the Institute of Personal Care Science of Australia finds that the global cosmetics market is worth $334bn (Dh1.2tn) and the global halal cosmetics market is estimated at $13bn. According to another research from Euro Monitor International, the beauty and cosmetics industry is expected to increase globally by 8.5 percent by 2014, representing one of the few sectors that continues to grow despite the global meltdown.

While a Malaysian study described that the global halal business worth $635bn a year, had expanded from the Islamic countries to the Western nations with growing Muslim populations. In France, which is home to about five million Muslims, sales of halal food are set to reach $7.2bn by the end of this year.

Mah Hussain-Gambles, Founder, Saaf Pure Skincare, one of the first halal cosmetics companies in Europe, said “The industry has also benefitted from a rising concern about the use of harmful ingredients in cosmetics and 75 percent of my customers are non-Muslims.” She further added “The principles are the same – they want something that does not harm the body, the purity and that is exactly the same as the halal movement.”

Ahmed Pauwels, CEO of Epoc Messe Frankfurt, organisers of Beautyworld Middle East 2010 apprized that with growing consumer awareness and the drive for quality ingredients, halal personal care products were a high-growth segment with tremendous potential. Similarly, Elaine O’Connell, Senior Show Manager of the beauty trade show opined customers in the prosperous and high-growth markets of the Middle East were becoming increasingly selective of the quality and content of the products they used, and this was reflected in the surge in demand for halal-certified beauty products.

Toboc Trade News

Al Tayer’s projection comes after global cues such as growth in the US, European, Chinese and Indian economies driving demand for crude and related products. It should be recalled, last week at an international conference on petrochemicals Mukesh Ambani, the oil baron said crude prices could rise to $100 a barrel in the near future.

Under the theme of ‘Finance for the Next Decade of Growth’, the two-day MENASA Forum, held between 23 and 24 May 2010, widely focused on discussing the critical opportunities and challenges confronting the region over the next decade. Over 250 members of the regional and international banking and financial services industry, regulators and senior business executives attended the Forum hosted by the DIFC.

Earlier, Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of the Dubai Supreme Fiscal Committee and Chairman of the Emirates Group delivered the key note address on the first day of the Forum. He told that the platform was a great occasion for discussing how the MENASA countries could forge greater integration in trade, investment and finance, and stressed at setting up of a mechanism for cooperation similar to that of the ASEAN.

Arif Masood Naqvi, Founder and Group CEO, Abraaj Capital observed the MENASA region remained as the heart of the emerging markets, helping drive global growth through the combination of population growth, economic reform and hydrocarbon wealth. Likewise, Al Tayer said the vast potential of the MENASA region was “undeniable” despite the challenges being faced in the post-global downturn environment.

Toboc Trade News

Bloomberg reported that Emaar Properties PJSC, the UAE’s largest developer is still collecting installments and fines from about 400 buyers for two non-existent towers called 29 Boulevard. According to Mehdi Nosratlu, who heads a group of investors negotiating with Emaar, most of them have paid 30-65 percent of the average purchase price of about half a million USD on this 45-storey twin towers. Proleads, a Dubai-based market researcher estimates builders in the emirate have delayed or cancelled projects worth about $330bn.

In addition to Emaar, several others including Union Properties and Nakheel are entangled in similar issues with their buyers. Sources say there are plenty of cases pending in law court related to real estate disputes. One of the recent decrees by Dubai government orders that property developers whose projects never got off the ground due to their “failure or negligence” are not allowed to keep any funds prepaid by individual investors.

The new laws carved out for this special purpose from hardly three years of Dubai realty contractual laws is believed to protect customer rights. Major feature is that it will help purchasers who entered boom-time sales contracts with developers, but came up empty-handed awaiting real estate projects that never started.

Sadly, during the realty windfall, many have entered into contracts without proper scrutiny of the deal providing undue advantages to the builders. Prima facie, it is not clear that the new laws will have any positive impact on those entered into deals in a hasty manner.

Deutsche Bank’s proprietary price index, which covers 13 main locations in Dubai, indicated that average housing prices for apartments declined 1.1 percent on a month-on-month basis, while villas slipped 1.7 percent on similar scale in March. Dubai’s real estate market saw a freefall for 18 months with property prices falling over 50 percent from their mid-2008 highs.

Toboc Trade News

The food imports have considerably risen in the last few years in view of the increase in population as well as water scarcity and hostile land conditions. The UAE and Saudi Arabia are already developing arable lands and food processing units in several Asian and African countries in a bid to overcome the snowballing global food shortages.

Harish Rupani, managing director of Equinox Trading, a food products trading company, told the Gulf News that growing food locally was not a viable option for the UAE as it costed three or four times more to grow local crops than it did to import. Dubai, the UAE’s commercial hub is one of the largest re-exporting centres in the world, and it traded in 2008 about $1.2bn worth of food-related items.

In the recent estimates by the Business Monitor International (BMI) indicate that food expenditure in the UAE reached $6.7bn in 2009. And it has been forecasted that it would grow by close to 3 percent in the current year.

The heavy dependence by the GCC on food imports also makes it the most vulnerable to not only price variations but also to increasingly changing food policies of the exporting countries such as blanket ban on exports of certain food commodities which are scarce in those markets.

The Standard Chartered’s most recent food report claims food prices are at a historic high and rising, around 80 percent higher than the low mid-2002 levels. Rupani said that prices of sugar and rice had tripled over the past five years.

The BMI is understood to have learned that the UAE government is making numerous efforts to increase the number of food processing plants in the country. The government has invested about $1.4bn into the food sector since 1994, and there are 150 food processing plants operational in the UAE today.

Toboc Trade News

Zayed stated the leadership and the people of UAE were confident, and would continue steadily and consistently the implementation of what it had adopted in terms of strategies and plans. The top priority was to build national capacity and launch human energy directed toward the horizons of excellence, innovation and competition, he added.

Dubai World’s announcement not only rocked the very financial establishments of the UAE but also many financial institutions of the region including that of neighbouring Qatar. Later, while the Dubai government detached itself from the investment firm calling it functioned as a separate entity, stock markets fell to the lowest level in eight years in Dubai, and Abu Dhabi and Qatar experienced similar trends as well.

On Monday, Abdulrahman al-Saleh, director general of Dubai’s department of finance said creditors should partly shoulder the responsibility for their decision to lend to the companies. Besides, Saleh remarked in an Arabic interview to Dubai TV, a station owned by the ruler of Dubai that the people think that Dubai World was part of the government, which was incorrect. On the contrary, John Sfakianakis, chief economist at Banque Saudi Fransi-Credit Agricole Group, said the distinction between the Dubai government and the investment company appeared minimal.

Without directly referring to the Dubai’s crisis, Sheikh Khalifa said any crisis on its severity would not be a reason for hesitation or retreat, neither a justification to despair nor inaction. He further added by saying that the country’s economic model would enable it to move from a labour-intensive economy to a more viable one of high-tech and knowledge-based which underscored environmental protection, and preservation of jobs for its progeny.

Toboc Trade News

Wadhwa stated that India’s trade and investments in the Gulf bloc were set to rise sharply as the fast economic growth had boosted energy demand in the country. She said India offered a “secure and predictable” market for oil and gas from the GCC, but should not be confined to these sectors alone.

It has been observed that India’s geographical proximity and historical trade links make the country a prospective parking place for the Gulf bloc’s investments, and guaranteed higher returns. India’s total trade with the six-member bloc increased from $19.58bn in 2005-2006 to $86.9bn in 2008-09, and is well ahead of the EU’s $80.6bn and the ASEAN’s $44.6bn.

Despite having extended and strong ties with the GCC, India just has been able to attract investments from the UAE. The cumulative investments from the UAE were just over $1bn during April-July this year, but the two-way trade between both countries stood at $44.5bn in 2008-09.

Although GCC is the largest trading bloc, the investments to India from the region did not keep pace with the growth. Currently GCC member states’ share is less than 1 percent of the FDI in India.

According to a recent United Conference for Trade and Development study, India’s FDI inflows jumped 85 percent in 2008 against a 14.5 percent decline in overall global FDI inflows. With the likely conclusion of FTA between India and the GCC by next year the country is expecting investments to pour in from the region.

Toboc Trade News

It should be recalled that China, the largest investor with about $1 trillion in the US treasuries has begun trial trade in its own currency since this month with its trading partners to cut down its losses in international trade. On sixth of this month, three Shanghai companies became the first to conduct cross-border trades with yuan/renminbi. The new Chinese rule allows using yuan instead of USD to settle trade accounts with merchants in Hong Kong and Southeast Asian countries on trial basis.

Though Geithner during his visit to China last month gave assurance on the safety on its investments, China did not seem to be convinced by the economic developments in the US lately. Nonetheless, Geithner during his Middle East visit is likely to stick on to Obama administration’s commitment to protect the value of the dollar and maintaining investor confidence in the US financial system.

Geithner is scheduled to hold high-level meetings on Tuesday and Wednesday with top government officials and leading business executives in Saudi Arabia and the UAE before leaving to visit Britain and France with similar goals. According to sources, Geithner is also expected to apprise the leaders of the US administration’s plans to bring down the deficit the moment the economy starts looking up.

However, it is not known how Geithner would defend the talks over the second economic stimulus package and the rising figures of the federal budget deficit for this fiscal year to nearly $1 trillion. Last week, one of Obama’s top allies in Congress had said that the lawmakers must be open for additional stimulus to overcome the economic uncertainties prevailing in the nation if the injection of $787bn to the economy in February was not providing desired results.

Toboc Trade News

Apart from the UAE, Saudi Arabia and Bahrain are also seemed to have impressed by livestock farming opportunities in Thailand. The southern provinces, the Andaman region of Thailand have been chosen for the proposed mega livestock farms.

The climatic conditions and geographic placing of Thailand are claimed to be the most suited in Southern Asia for livestock production and paddy cultivation. However, the UAE’s interest in rice production would not be possible due to shortage in suitable lands.

The UAE already has ambitious plans to establish agricultural production centres in Sudan and Pakistan. The Abu Dhabi Fund for Development aims to develop 70,000 acres of land for food production in Sudan alone.

Similarly, Saudi Arabia has also invested in overseas agricultural farms including Pakistan to ward off any potential food shortage threat like that which confronted the globe last year. The desert nations are showing keen interest in developing agricultural and livestock farms outside their region since engaging in similar activities in the region would require manifold expenditure, and also not sure of the results.

To cater to the burgeoning Middle East market, Thailand has made several plans for investing in the production of halal meat and dairy products in countries such as, Pakistan and Bangladesh. According to Thai government sources, Charoen Pokpand Foods, the largest agri-business firm of the country is preparing to develop mega livestock farms in Russia as part of its expansion plans to fulfil its export shortfalls.

Toboc Trade News

The projects in the pipeline and in progress range from city trams to heavier freight routes. From the sponsorship line-up including IBM and Sharp during the ongoing MENA Rail 2009 conference in Dubai made it apparent that besides railway companies there are many in the fray vying to have a piece of the mega Gulf railway pie.

Various companies that provide rail-related products and services have opened offices across the Gulf region to utilize business opportunities and market their wares. Invensys, a UK based company that provides industrial automation, rail transportation and controls is one such company that has set up office in Dubai to augment its regional visibility.

Ala Ghanem, the regional director of business development at Invensys opined the Gulf was the most promising region at the moment for railway and related businesses. He acknowledged that there were not only many projects coming up but also were massive ones that no one in this field could afford to sideline.

The foremost project is the first proposed route of 1,970km long running through Kuwait, Saudi Arabia, and Bahrain over Qatar, and crossing the relevant stretches of water by bridge and continuing to UAE and Oman. The second will cover 1,984km from Kuwait to Saudi Arabia before passing through UAE and ending in Oman. The ultimate goal of this project is to link the whole of Middle East with each every country of the region. Once completed it is likely to have 16 lanes and an approximate length of 19,000km.

Other projects such as $4.2bn worth Dubai metro system, Abu Dhabi’s freight rail network, 130km of metro lines and a 340km tram system, 580km of high-speed rail to Al Ain, Dubai and Al Gharbia and Bahrain’s $8.13bn rail line with six lanes stretching 184km are few of those projects attracting many from this field.

According to Unife, a European rail consortium the global market is worth $167bn (Dh608.81bn) a year, and the Middle East and Africa account for just about $5.5bn. Michael Clausecker, the director general of Unife asserted that though it would not be the largest market, but it was one with substantial opportunities and substantial growth potential.
Toboc Trade News

Some of the experts argued that the six Gulf nations had planned their 2009-10 budget maintaining oil prices at an average of $45-55 a barrel, therefore, taking into account the month-long stable oil prices at $50/barrel would in fact record marginal surplus rather than deficit budgets. Although EIB had warned of a deficit budget, they had ruled any possibility of 1990’s situation that inflicted heavy debt and low assets among the GCC member states. The reason cited is that they had accumulated huge financial reserves since last five years owing to a steady increase in oil prices, and particularly the first quarter of last year when the prices skyrocketed to reach the all time high of $147/barrel.

In 2008, though GCC member states estimated a budget surplus of $32bn, they amassed about $190bn surplus since the oil prices averaged at $95/barrel throughout last fiscal. Experts pointed out that if at all any member in the GCC to fall short of a surplus would be Saudi Arabia, because it produces almost a third of the total output of the region to make it the biggest loser or gainer while the prices fluctuate. As an OPEC member, Saudi Arabia along with other members had cut oil production several times since last November to halt the slide in oil prices, and the current production stand at 8.2mn barrel/day from last year’s high of more than 9mn bpd.

Toboc Trade News

Industry observers said though the intra-day trade saw marginal dip in oil prices, however early next month would see further slide before OPEC’s likely production cut on March 15. Nevertheless, they further predicted that the traders were expecting an increase in demand by April in view of lower stockpiles to spark off demand, and a gradual price rise would follow until it stabilized at $60 per barrel by September this year.

Due to the sliding oil prices, most of the companies are reluctant to increase their inventory expecting the prices to fall further and avoid losses. But by April, the depleting stockpiles are likely to prompt the buyers to increase their inventory, and the trend is expected to push oil prices up despite receding global demand.

In its latest monthly report on Wednesday, the Paris-based IEA stated the forecast for global oil demand was revised down by 570 kb/d to 84.7 mb/d in 2009 (-1.1 percent or -1.0 mb/d year-on-year) after the IMF again slashed its GDP growth prognosis to half a percent. The worsening global slowdown was blamed to be the reason for them to crimp the oil guidance further, the report added.

According to sources, the US crude oil inventory unexpectedly fell by close to 2mn barrels.
However, the lower demand due to the US economic crisis has weighed down against their reduced supplies severely. Similarly, the reports from China, the second largest oil consumer after the US have also shown the crude imports dropping by 8 percent, a lowest level in 15 months despite showing marginal increase in domestic demand.

The diminishing demand for naphtha, a by-product of crude which is primarily used as a feedstock for the production of plastic and synthetic fibres has also contributed to the price fall. The IEA warned the lower oil prices were forcing many companies to postpone or cancel many exploration and production projects which would ultimately make a huge dent in supplies when the global economy turned around. Nonetheless, analysts deduce that reaching the high of $147 per barrel once again is most unlikely as governments and companies are investing more on renewable energy sources owing to the fears of higher oil prices and climate change.

Toboc Trade News