UAE TRADERS OPT FOR FOODSTUFF FROM OTHER COUNTRIES TO MAKE UP FOR UKRAINE SHIPMENTS

The Russia-Ukraine conflict has paralyzed not just Ukraine but also many countries. Food supply constraint is a major concern for most of them. Wheat, a key commodity, has seen a sudden surge in its price as Ukraine has been its major exporter. All shipments have been barred, with the strife between the two nations still raging on. UAE foodstuff trader and major retail player Dr. Dhananjay Datar, MD at Al Adil, states that wheat can be brought in from India, Pakistan, and Australia. He also expressed his opinion about the shipments from the Mumbai port, “Yes, rising container costs are a worry, but that’s something all importers in all industries have been dealing with. Our shipment costs are at $950 for a TEU presently. It used to be $50 – $100. The important thing is to absorb the costs and try not to pass them to the customers.

Sky High Container Rates

Roshmon Manoli, Vice President, Freight Forwarding at Consolidated Shipping Services, expressed his views to the Gulf News, “On shipments from Jebel Ali to East Africa – a major food export route from here – carriers are releasing bookings only with a premium.” Shipment premium is based on sea priority and shipping guarantee. The container space situation is tight, and space is available only for bookings made two weeks in advance. The Ukraine situation has impacted cargo ships that pass through the Black Sea and created backlogs at European ports, another reason for higher shipping rates.

Rising Oil Prices

Another factor that has fueled the rocketing food cost is the never-ending rise in oil prices. When the year started, it was $100 a barrel, which spiked to $200 since the invasion of Ukraine.

Farad Mourad, a senior market analyst at XTB MENA, admits that the price hike raises the transport cost for all agricultural products, leading to inflation, which again could affect a country’s monetary policy. “Countries like Egypt could feel a significant impact as it remains largely exposed to the spillover effects of the war in Ukraine. Egypt’s import of agricultural products comes mainly from Russia and Ukraine as they provide 58 percent of cereals and wheat needs. Following this, they have diverted attention towards other producers like France, Canada, and the US. However, these countries could struggle to respond to the rapid increase in demand.”

According to commodity market analysts, the food commodities have started to show an upward pull, and the impact is severe. The Russia-Ukraine invasion has disrupted shipments, with the trade ministry suspending exports of fertilizers.

Steeper rates in oil have directly added to foodstuff production and transportation costs, although vacillating within a smaller band. The escalating geopolitical tensions also have a direct bearing on foodstuff, especially since both Ukraine and Russia are export giants in key food commodities like wheat, corn, and sunflower oil. Wheat futures have soared to a high not seen since the year 2008. The higher prices will eventually affect customers as it proves to be expensive for food makers who are likely to mark up their product pricing.

Wheat or Rice – Which Is Most Affected?

The wheat price has shot higher, making it an expensive food item. Interestingly, rice prices have not risen. As Sudhakar Tomar, President of India Middle East Agro Trade Industry & Investment Forum states, “Rice prices have not risen as much as other grains, but because it is an alternative staple, prices will climb up owing to freight and logistical expenses as well as increased demand.”

The price rise is not restricted to wheat and rice but includes corn and sunflower, which have gone up since February 24th at the onset of the Russian invasion. Sudhakar Tomar added, “Russia and Ukraine are two of the world’s top wheat exporters exporting more than 60 million tons of wheat each year, accounting for 25 percent of global wheat commerce. If the conflict and sanctions continue, the supply chain for food and fertilizers, petroleum, and banking transactions will remain disrupted, causing hardship for millions who rely on imports. Weather problems in Iran, Syria, Iraq, Turkey, and Egypt have exacerbated worldwide wheat shortages.”

UAE – THE EVERRESILIENT NATION AND SAFE HUB

With sovereign wealth funds for investment in development and infrastructure projects, healthy financial reserves, and an ideal strategic location, the UAE has created a modern and diverse economy. The economic hub that the UAE boasts of today came into being in a short span of fifty years. In a brief period, UAE has managed to redefine its limits. The pandemic outbreak is the best parameter that revealed the country’s solid economy, growth, and adaptability to the global challenge.

Productive Inflow

Cumulative inward FDI growth stood at 44.2 percent from 2019. UAE ranked first in the Arab world and 15th globally in the Kearney FDI Confidence Index for foreign direct investment in 2021. The UAE ranks first in the West Asia region, receiving 54.4 percent of total FDI inflows amounting to $36.5 billion and first in the MENA region with 40.2 percent of the total FDI inflows amounting to $49.4 billion. In a staggeringly short time, it has managed to redefine its limits.

Remarkable Infrastructure

The desire to extend the nation’s horizons, push forward, and have a favorable business environment along with the updated procedures to meet global standards keeps up the capital inflows. UAE exhibits a model environment for investment and entrepreneurship. UAE stands a class apart as a worldwide magnet for capital and talent. The country aims to excel in the following fields in the immediate future: artificial intelligence, the Internet of Things, Blockchain, Innovative Medical Technologies, highspeed transportation, augmented virtual reality, robotics, self-driving cars, and renewable energy. Having ranked second globally in the Resilience to Epidemics 2021 index issued by the Consumer choice center during the Covid scenario, UAE owes it mainly to the prompt action taken in handling the situation by strict sanitation, lockdown, and social distancing measures. During the pandemic, the Central Bank’s support was equally crucial contributing AED 100 billion and a range of support packages to the economy. In 2022, the growth chart is set to hit 3.5 percent growth in real GDP and 3.9 percent growth in real non-oil GDP.

Regulatory Environment

UAE is cited as one of the most advanced countries globally in creating a regulatory environment that protects the investor and supports commercial activity providing a flexible and competitive legislative and procedural umbrella that helps stimulate foreign investment and ensures business stability. Home to several businesses, including free zones, the total trade of goods for free zones rose to AED 658.9 billion in 2019, signifying an 11 percent increase compared to the previous year. Being a nation built on trade and with a logistics infrastructure connecting to more than 250 cities worldwide with shipping routes to more than 400 cities, the UAE is the most efficient and most geographically broad in the region.

Planning for the Future

The Emirates Energy Strategy 2050 is set to meet a mix of renewable and clean energy sources to balance economic needs and environmental goals. UAE will invest AED 600 billion until 2050 to ensure that the demand for energy and sustainable growth in the country’s economy is met. Its priority in the next 50 years is to accelerate economic development, encourage small and medium-sized enterprises, and instil an entrepreneurship culture. This comprehensive economic and developmental program will focus on developing a knowledge economy, fostering innovation, establishing strong bilateral relations with international partners, and upgrading the legal frameworks to attract investment, ideas, entrepreneurs, and highly skilled candidates from around the world.

Competitive Costs

AED 58 Billion is the allocated UAE 2021 budget to instigate the much talked about program “Projects of the 50”. The World Competitiveness Yearbook 2020 Report ranked UAE first in the list of countries with the best electronic infrastructure globally and 31st for quality of digital life in 2020. The UAE is a member of the World Trade Organization (WTO) and the Greater Arab Free Trade Area and has free trade agreements with the European Free Trade Association. Having signed 117 double taxation agreements with countries across five continents, UAE has no restrictions imposed on foreign exchange. Its competitive finance costs, extensive liquidity levels, robust banking system, low inflation, low tariffs all boost the economy. The country turned in 2021 when it allowed 100 percent foreign ownership of companies in many sectors, thus removing the need for an investor to secure a local partner. The Projects of the 50 also has revamped the visa and residency system to attract skilled professionals in key fields like health, scientific research, technology, and other sectors. With the help of the well-focused program “Projects of the 50”, the nation is sure of creating an optimum commercial and legal environment and forging international partnerships with futurefocused countries, thus making the UAE a catalyst for regional and global growth.

UAE – THE EPICENTER FOR COVID-19 VACCINE DISTRIBUTION

cssAbu Dhabi ports is playing “a vital” role in the global fight against COVID-19. With one of the region’s largest ultra-modern pharmaceutical logistics facilities now operational, the port is poised to undertake the storage and distribution of more than 70 million vaccines. 

Abu Dhabi Ports has dedicated a 19,000 square meter temperature-controlled warehouse facility in Khalifa Industrial Zone Abu Dhabi (KIZAD), which already houses more than 1 million vials of the vaccine. The facility has the capability to store vaccines and other pharmaceutical products at a range of 2 to 8 degrees as well as the more extreme range of -80 degrees. 

The Hope Consortium- Helping the World Get Through This Global Pandemic

Abu Dhabi is spearheading the launch of the Hope Consortium. This UAE-based public-private partnership includes the Abu Dhabi Ports Company, Etihad Cargo, Rafed, the healthcare purchasing arm of Abu Dhabi-based ADQ, and SkyCell of Switzerland. The Hope Consortium represents a complete supply chain solution to address vaccine transport, demand planning, sourcing, training, and digital technology infrastructure and facilitate vaccine availability worldwide. 

It will offer international governments, non-governmental organizations, and vaccine suppliers a cohesive solution across every supply chain step – from air freight, regional storage and temperature monitoring, inventory management, cold and ultra-cold container solution, and regulatory clearance and healthcare and pharma quality assurance.

Consortium partners already have extensive expertise in the global delivery of millions of COVID-19 related items, such as personal protective equipment, diagnostics consumables, vaccines, and pharmaceuticals.

Distribution of the vaccines, which will be stored in Abu Dhabi Ports Company facilities, will be carried out by Etihad Cargo. The national carrier will leverage its extensive intercontinental network, fleet, and charter flights to supply vaccines globally. Etihad Cargo has outstanding pharmaceutical logistics expertise and specialized pharma and healthcare service, PharmaLife, and the IATA CEIV Pharma certified product to facilitate temperature-sensitive cargo between +250C and -800C.

Rated has already managed large volume products before and during the pandemic for the UAE and humanitarian initiatives. With this collaboration, it can consolidate its efforts to meet the challenges of distributing sensitive pharmaceuticals quickly to global partners in the public and healthcare sectors.

The transportation of vaccines will be done using SkyCell’s hybrid containers. These storage and transportation containers are secured through an IoT monitoring service that tracks temperature conditions to ensure sensitive vaccines are protected even under extreme conditions. These containers maintain steady temperatures for an average of 202 hours (8.4 days) and self-recharge automatically in a cooling chamber or reefer truck.

Amid an anticipated surge in vaccine logistics, this collective expertise will garner a multi-faceted capability to provide seamless logistical solutions.

Abu Dhabi – A Local, Regional, and Global Distribution Hub For COVID-19 Vaccines

KIZAD has one of the largest cold chain and ultra-cold storing in the region and enables the UAE’s drive to spearhead global immunization efforts that will positively impact millions of lives. The vaccine storage processes with the international best practices governing the long-term storage of pharmaceutical products will ensure vaccines’ efficiency. Such a robust solution is necessary because the vaccines are composed of genetic and protein ingredients and must be stored in optimal temperatures for the longest possible period to ensure their efficacy when administered.

Abu Dhabi Ports is ready to play a leading role in the end-to-end supply chain, including storing, processing, and distributing this extremely sensitive product. These facilities at the Abu Dhabi port will leverage its capabilities as an innovation epicenter serving the Middle East and wider world through Abu Dhabi as a supply chain gateway connecting East and West.

Moreover, with two-thirds of the world’s human footprint within a four-hour flight of Abu Dhabi, the investment in technological expertise and world-class infrastructure facilities means it can serve as a global logistical hub too, and for, the world.

SAP’s Vaccine Collaboration Hub (VCH)

SAP has opened a vaccine collaboration hub in Dubai to manage vaccine supply and distribution. SAP’s VCH is built on the SAP Information Collaboration Hub for Life Sciences. It covers the end-to-end process from manufacturing to controlled distribution to administration and post-vaccine monitoring.

Businesses that are part of the vaccine production process, from manufacturers, logistics service providers, and pharmacy companies to wholesalers and dispensers, can run their critical vaccine processes on SAP software.

COVID-19 has put much pressure on the life sciences industry. To bridge the large gap in their supply chain strategy in this industry, SAP’s VCH is a one-stop-shop for the life sciences industry to manage their vaccination procedures and tap into a source of suppliers, even those across industries.

The VCH, part of SAP’s industry cloud strategy, provides the critical network and technology capabilities required to deploy large-scale vaccination programs and drug distribution effectively.

SAP has designed the VCH as an extension to its business network and will support organizations in managing vaccine supply distribution better and helping governments and their industry partners coordinate and successfully carry out mass vaccination programs.

Also, the VCH provides a backbone to better mitigate such emergencies in the future.

cssAir Cargo – In Full Throttle for COVID – 19 Distribution

Governments worldwide have a tall order of reaching the COVID-19 vaccines developed by Pfizer and Moderna to the masses. In turn, this means that logistics firms have a “mission of a lifetime” with distributing these vaccines.

The International Air Transport Association (IATA) has released guidance to ensure that the air cargo industry is ready to support the large-scale handling, transport, and distribution of a COVID-19 vaccine. IATA’s Guidance for Vaccine and Pharmaceutical Logistics and Distribution provides recommendations for governments and the logistics supply chain undertakings. The Guidance lines have been prepared in collaborations with a broad range of partners, including the International Civil Aviation Organization (ICAO), International Federation of Freight Forwarders Associations (FIATA), International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), Pan American Health Organization (PAHO), UK Civil Aviation Authority, World Bank, World Customs Organization (WCO) and World Trade Organization (WTO).

The crucial points addressed in IATA’s Guidance for Vaccine and Pharmaceutical Logistics and Distribution are:

  1. To ensure availability of temperature-controlled storage facilities even in such places where such facility is absent.
  2. The chart down the roles, tasks, and responsibilities of vaccine distributors, government authorities, and NGOs.
  3. Re-open borders without quarantine to re-establish air connectivity to ensure adequate capacity is available for vaccine distribution.
  4. Ultra-cold chain facilities across the supply chain to be made available and trained staff to handle time- and temperature-sensitive vaccines. 
  5. Timely regulatory approvals, fast-track clearance by customs and health authorities.
  6. Swift and efficient procedures for overflight and landing permits for operations carrying the COVID-19 vaccine.
  7. Tariff relief to facilitate the movement of the vaccine. 
  8. High level of security to ensure that shipments remain safe from tampering and theft.

These guidelines are in keeping with international standards and procedures related to the transport of vaccines. It will be updated regularly as information is made available to the industry. IATA has also established a joint information-sharing forum for stakeholders. The massive volume of vaccine shipments will require early planning, and this guidance material is important to ensure that they are scalable. 

The complex task of delivering billions of doses of a vaccine, storing it in a deep-frozen state, distributing it to the entire world efficiently will be one of the largest and most complex global logistics operations ever undertaken!