Qatar food imports hit after Arab nations cut ties: Trade Sources

Reuters , Monday 5 Jun 2017

A decision by the Arab world's strongest powers to break off diplomatic ties with Qatar is already hitting food imports into the small Gulf state with reports that Qataris are beginning to stockpile supplies, trade sources say.

Saudi Arabia, Egypt, United Arab Emirates and Bahrain cut relations with Qatar on Monday over alleged support for Islamists and Iran in a coordinated move. Yemen, Libya's eastern-based government and the Maldives joined in later - opening up one of the worst rifts in years.

Qatar, which has a population of 2.5 million people, is largely dependent on imports of foodstuffs to meet its needs.

Trade sources, who declined to be named, said the UAE and Saudi Arabia had stopped exports of white sugar to Qatar.

Qatar is dependent on the UAE and Saudi Arabia for its white sugar imports, which are estimated at less than 100,000 tonnes annually. Consumption is traditionally higher during the Muslim holy month of Ramadan, which is currently being observed.

"Supplies of sugar have been stopped and there is no indication when they could resume," one Middle East based trade source said.

Qatar's cabinet said earlier on Monday it was still open for trade. "The Council would like to reassure Qatar’s citizens and residents that the government had already taken the necessary measures and precautions to ensure that normal life continues, and that there will be no negative impact caused by the latest measures," the Qatari government said in a statement.

"In addition, sea ports will continue to be open for trade, and air space will continue to be open for trade, transport and air travel, with the exception of the countries that have closed their borders and air space."

Thousands Of Trucks With Food Stuck At Border

There were already signs of emerging difficulties. Two Middle East trade sources pointed to thousands of trucks, carrying food supplies, stuck at the border with Saudi Arabia which were unable to cross over into Qatar.

Eva Tobaji, an expat resident in Doha, told Reuters after returning from shopping: "People have stormed into the supermarket hoarding food, especially imported ones ... It's chaos - I've never seen anything like this before."

Trade sources pointed to the likelihood of food shortages growing until there was a resolution of the crisis. About 80 percent of Qatar's food requirements are sourced via bigger Gulf Arab neighbours, such as the UAE and Saudi Arabia.

"There will be a crisis for them maybe in the next month or so until they figure out their supply chain," another Middle East trade source said. "The situation as it now stands is like a siege."

Saudi Arabia's Ports Authority notified shipping agents on Monday not to receive vessels carrying Qatari flags or ships that are owned by Qatari companies or individuals.

The move followed a similar step by the UAE port of Fujairah, which issued a notice barring all vessels carrying Qatari flags and any destined for or arriving from Qatari ports.

The world's no. 1 container shipping line Maersk said on Monday it was still open for business to and from Qatar, adding that it was following developments closely.

Qatar has denounced its diplomatic isolation as based on lies about it supporting militants. It has often been accused of being a funding source for Islamists, as has Saudi Arabia.

Iran, long at odds with Saudi Arabia and a behind-the-scenes target of the move, blamed U.S. President Donald Trump's visit last month to Riyadh.

Trade sources said it was possible that Qatar could look at other sources of food from Asia and also Iran if the diplomatic crisis was not resolved.

Reza Nourani, chairman of Iran's Union of Exporters of Agricultural Products, was quoted by the semi-official Fars news agency as saying that Tehran could export food to Qatar by sea, which could reach the country in 12 hours.

"We can export any kind of agricultural products and food from Iranian ports of Bandar Abbas, Bandar Lengeh and Bushehr,” Nourani told Fars, which is believed to be affiliated to Iran's hardline Revolutionary Guards. 

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