The Agriculture in Oman is projected to register a CAGR of 2.4% during the forecast period (2021-2026).
Agriculture in Oman has registered positive growth during the COVID-19 pandemic outbreak. Agriculture is considered the pillar of economic growth, thus, it resulted in an immediate response from the national government to ensure food safety and security in the country. According to Oman’s agriculture ministry, despite COVID-19, the agriculture and fisheries sector saw a growth of 9.8% in 2019-2020. Hence, Oman’s agriculture market witnessed impressive growth during the pandemic.
The increase in the adoption of advanced farming technologies and conducive government policies supporting domestic crop production are some of the factors driving the market growth in the country. Oman majorly meets its domestic fruits, vegetables, and cereals demand through imports. Therefore, to reduce import dependency, the country is aiming for self-sufficiency in agricultural products by encouraging its farmers to adopt advanced farming techniques.
Agricultural production of Oman constitutes mainly dates, vegetables, fruits, and other crops in a minor quantity. According to FAO, the total amount of agricultural land present in Oman was about 1.4 million hectares in 2019, 1.5% of the total land area. Fruits like bananas and papaya are also grown in coastal regions, which accounted for 23,837 ton of production in 2018. Oman has increased its barley, sorghum, and wheat production in recent years. The government has launched several initiatives to encourage private sector production, such as updating regulations, providing low-interest loans, aiding domestic production, and running campaigns to increase the visibility of locally made products, which is anticipating the growth of the agriculture in Oman during the forecast period.
Key Market Trends Consumer Shift Towards the Healthy Diet
Due to the rising disposable incomes, people in Oman are presently more focused on healthier diets, with more fruits and vegetable inclusion.? Additionally, with the increasing ex-pat population in Oman, there is a shift in the traditional dietary habits toward organic food. ?This is anticipated to influence vegetable production in the country. Moreover, the interest in wellness and immunity has spiked as a result of the COVID-19 pandemic, leading to a higher demand for fruits and vegetables in the domestic market and in partner countries. This factor is likely to have a significant impact on market growth.
Dairy consumption is likely to witness the fastest growth, followed by cereals consumption. While the consumption of cereals is set to rise due to its prominence in the daily meal, Furthermore, the demand for dairy and cereals is likely to be supported by tourist arrivals anticipated to increase on the back of the government‘s plan to strengthen the tourism sector through the development of tourist spots and by encouraging private investments.
The reliance on imports has further increased with the growing demand for high-quality produce. Thus, with the rising demand for animal-sourced protein, fruits, and vegetables, the government’s support to ensure a sufficient supply of commodities influences the agriculture market in Oman. Thus, the market is projected to record a healthy growth rate during the forecast period.
Development in Retail Chains
The distribution network and retails chains, with respect to agriculture, are expanding consistently in Oman. The Omani retail industry is characterized by strong consumer demand, robust economic growth, distinct demographic factors, and a high-end technology system that ensure better customer service and efficient customer checks.
The increasing presence of major retailers and supermarkets and their aggressive import strategies are resulting in better access to many fruits and vegetables for the Omani population at a comparatively cheaper rate. In 2017, Lulu hypermarkets alone imported 65 metric tons of vegetables and bananas to Oman to increase the availability of agricultural produce in the local markets.??Oman Investment Authority announced a new project of an integrated company for the marketing of vegetables and fruits in the country, under Oman Food Investment Holding Company. Under the project, retail outlets are likely to be established in densely populated cities. Additionally, SPAR opened its supermarket in 2017. The convenience-focused store has a retail selling area of 395m², of which 85m² is dedicated to fresh produce, fish, and meat. Thus, increase in urbanization rates and the rise of hypermarkets have also triggered the demand for high-value processed foods. Moreover, the convenient logistics service provided by the retail chains is changing the consumer demand patterns in the market studied in Oman.? Hence, the changing retail structure may influence consumer shopping behavior. Thus, this is likely to improve the market growth.
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