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GAC sees activity upturn as Oman boosts food security

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March 7, 2022

By Ashan Silva, Business Manager at GAC Oman – Sohar

2021 was an eventful year for the dry bulk freight sector. According to Simpson Spence Young’s 2022 Outlook Report, vessel earnings across all main bulker sizes last year buoyed to 13-year highs as global economies recovered from the pandemic-reduced slump, leading to strong demand growth. In many places the outlook is bullish, including Sohar where dry bulk shipments heading for the Omani port are expected to see significant growth in 2022 as local sugar and flour production increases.

The production boost is part of Oman’s food security initiative which includes 128 projects announced by the Ministry of Agriculture, Fisheries and Water Resources in October 2021. The projects will be implemented over the next five years and will include an initiative to promote imports and exports through Omani ports. 

Construction of a sugar refinery and food processing cluster is underway at Sohor Port and Freezone. The refinery, nearing commissioning, will be the Sultanate’s first sugar refinery. Its initial capacity will be 700,000 tonnes of refined sugar per annum and is anticipated to grow to up to one million tonnes in the second phase of the project. The increased shipment of feedstock and finished products will enhance the shipping business through port of Sohar. 

Wheat siloes are also under construction as part of the food security initiative. The production of all types of flour and their distribution within Oman and neighbouring countries is already underway, and the new siloes that will soon be commissioned will add a further 160,000 tonnes of capacity. 

Meanwhile, the military action in Ukraine is also likely to impact local port activity and imports for this commodity to Oman, one of Ukraine’s top wheat buyers.

The shipment of other bulk cargoes continues apace. The export of aggregate is expanding through the Steinweg terminal in Sohar. Various sizes of aggregate, ranging from five to 40 millimetres, are being exported to Qatar, Bahrain, Kuwait, Bangladesh, and other nations. Exporting capacity ranges from 600,000 to 1,000,000 metric tonnes per month.

Vale operates one of its biggest pelletising plants in Sohar and is importing iron ore fines and exporting pellets to various destinations including Egypt, Abu Dhabi, Saudi Arabia, and Malaysia. Occasionally, Vale Oman imports coal for their operations. Additionally, Oman Oil Refineries and Petroleum Industries Company exports petroleum coke to Gulf coast countries as well as international markets such as India, UAE, Kuwait, Switzerland and Egypt.

Sohar International Urea & Chemical Industries commenced operation in 2009 and is now producing around 1.3 million metric tonnes of granular urea per annum. The company is exporting its products to international markets such as the US, India, Thailand, Africa and Latin American countries.

In January 2022, the Oman Chamber of Commerce and Industry met with representatives from the Netherlands to discuss partnerships on boosting trade and investment. Oman stands to benefit from Dutch experience in developing and modernising ports, providing opportunities for Dutch businesses to take advantage of Oman’s strategic location on international shipping routes and its proximity to emerging markets in Asia and Africa.

GAC operations around the world are generally optimistic about the outlook for dry bulk and expect tight vessel supply and strong demand to continue as enduring market features. 

Choosing an agent that applies the highest standards of quality, safety, compliance and sustainability in all its operations enables businesses to capitalise on opportunities for growth. As a ship agent, GAC has handled dry bulk port calls for a range of clients, including international and local commodity traders, national and international utility companies, and owners and operators across sectors that include coal, ore, fertiliser, grain, flour, and sugar. With customised and reliable services, GAC delivers cost efficiencies while meeting operational requirements. 

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