While not perhaps the lowest hanging fruit, opportunities for investing in Oman's growing halal food industry are nevertheless ripe for the picking.
In response to mammoth increases in global demand for food, and in particular demand for halal food, the Omani government is keen to attract investment in its blossoming halal agribusiness industries.
Worldwide, the trend is already growing. While Southeast Asia, and in particular Malaysia, Thailand, and Singapore, is still the main force driving the market, in recent years there has been more interest in and around the Gulf region. The fact that the inaugural Global Halal Tourism Summit was hosted by the Arabian Travel Market (ATM) in Dubai earlier in 2017 serves as further proof that investors in the GCC may have found something they can sink their teeth into. And, with 90% of panelists at the event confirming a belief that there is a gap in the market for halal cuisine, prospects are looking juicier and juicier. “Halal” is Arabic for “permissible” or “lawful,” and is found in the Quran denoting not just foodstuffs, but also practices in general, that are compatible with the Islamic faith. This is wide-ranging and usually refers to consumer habits, as well as services such as finance and logistics. Until now, halal food has been considered a niche segment, usually found separated from mainstream products in the average supermarket. Muslim spending on halal products and services is set to increase 52% to USD2.74 trillion by 2018. On halal food and beverages alone, spending will reach USD1.6 trillion by 2018. Furthermore, considering there are nearly 2 billion “de facto” consumers of halal food in the world, this seems just the tip of the iceberg of the industry’s growth potential. In Oman specifically, there has been 200% growth in the retail halal food market since 2012. However, at the moment, demand is for the most part plugged with imports, sourced from the UAE, India, Saudi Arabia, the Netherlands, and Germany. In fact, in 2015, Oman represented 3.99% of global imports in food products, and just 1.6% of exports. Elsewhere in the Middle East, governments are ramping up their investments in domestic halal production. This is due in part to a desire to eradicate imports and to develop internal capacity that can eventually satisfy domestic demand. However, these governments are also not blind to the wealth of prospects here for economic diversification, seizing, in many cases, the chance to capitalize on the opportunities proffered by halal markets. Though Oman has been largely absent from such investments in the halal food segment, the tides may be about to turn. At the next Agro Food Oman exhibition, due to be held in April 2018, there will be a whole section dedicated to promoting halal food investment opportunities. Oman is looking to attract companies pioneering innovative agricultural solutions, such as hydroponics, precision agriculture, and cellular farming, which themselves may be considered halal methods of production. Moreover, the Ministries of Agriculture and Fisheries is allocating 50,000 agriculture plots in Al Maghsar, south of Mussannal, for integrated agriculture and aquaculture projects, targeting specifically youth farmers and SMEs. These sites will be fitted with greenhouses, water irrigation facilities, and aquaculture units to allow for diverse methods of production. In March 2017, promise of weight behind such initiatives came in the form of an OMR30-million (USD77.6 million) sukuk approved by the Capital Market Authority for investment in Islamic and sharia-compliant ventures, some of which could well be earmarked for halal agribusiness ventures. Ultimately, the Omani government has big plans for its halal market. While the seeds are just being planted now, the government’s rhetoric indicates a desire to transform the Sultanate into a hub for halal food production not just to supply domestic demand, but also, in the long term, making use of strategic geography and connectivity links for exports to the region and beyond.