Saudi Arabia needs to focus on the quality of production and agriculture of coffee beans and increase its research if it wants to compete in the global market, concluded an international gathering.
Under the patronage of Governor of Jazan Prince Mohammad bin Nasser bin Abdulaziz, organized by the Ministry of Culture, Saudi Arabia hosted the first international forum to examine the benefit of coffee as national wealth, explore available investment opportunities, and discuss financing options and the role of this activity in the domestic product.
The Ministry of Culture organized the international “Saudi Coffee Sustainability Forum” in Jazan between Oct. 1 and 2 to discuss the value chain of Saudi coffee and relevant economic, social, and environmental aspects of sustainability.
It provides an overview of the local economy and presents practical papers and in-depth research that discuss aspects related to agriculture, production, and sustainable international practices for growing coffee beans.
- Government cooperation
Expert in agricultural economics, Mohammad al-Qunaibet, stressed the importance of the cooperation of authorities such as the Ministry of Culture and the Jazan Mountain Development Authority in scientific research to obtain high results that will lead to the sustainability and development of the sector.
According to Qunaibet, a scientific study revealed that the average costs are dedicated to preparing land and equipment, with about 79 percent, while the rest goes to variable expenses, including labor, irrigation water, and harvesting.
The expert pointed out that the world produces 10 million tons of coffee beans, three of which are made by Brazil, while Saudi Arabia produces 650 tons.
Saudi competition must be based on high quality and a “very luxurious” product to compete and market globally, said Qunaibet.
- Funding
The head of the development impact department at the Agricultural Development Fund, Bandar al-Rabiah, stated that the farm funding program amounts to $800,000 for farms in rural areas, pointing out that this year the funding recorded a leap, bringing the total value of approved financing to $3.2 million in Jazan alone.
Rabiah called for intensifying the efforts of the relevant authorities to increase cultural awareness of coffee to push funding to higher levels.
- Increased prices
For his part, Karl Weinhold, a researcher in rural development and the coffee economy, explained that coffee is currently experiencing price risks due to environmental changes and climatic conditions, pushing prices to rise globally.
Weinhold pointed out that many local farmers in the coffee industry around the world have been suffering from low income and poverty recently, explaining that it is possible to find diversified sequential paths.
He demanded that small coffee farmers must be aware that working collectively ensures the continuity of their businesses and industries.
- Economics of coffee
Furthermore, a professor of economics at the College of Business Administration at King Faisal University, Hassan Hajooj, stated that the coffee sector could become an economic tributary, provided that authorities take advantage of the geographical location of the Kingdom between the coffee-growing regions in Asia and Asia.
The Kingdom is one of the largest importers and consumers of coffee, ranking eighth in the world.
Hajooj added that Saudi consumption increased 100 percent in 2019, which means an increasing consumption trend in the Kingdom.
The Ministry of Commerce issued 7,300 commercial records, 2020 for cafes, which is an indicator of the contribution of coffee to economic activity.
The Kingdom’s annual spending on coffee consumption amounted to $346 million, said Hajooj, while the market value of restaurants and cafes is estimated at a compound annual rate of 8 percent.
The professor estimated that the linear forecast for the value of the Saudi coffee import bill would rise to $425 million until 2023, noting that the coffee sector accounted for about 0.86 percent of Saudi Arabia’s gross domestic product in 2020 and that that figure was set to rise to 6.18 percent over the next five years.
- Global Trends
Hajooj added that the current global trends prove the increased demand for coffee consumption, especially with the change in the behavioral pattern of consumption in China and India.
- Global Center
The expert called for Saudi Arabia to adopt a global center in coffee production within the framework of the 10th National Development Plan aimed at making the Kingdom a global logistics hub and supporting Vision 2030.
He explained that the Kingdom could become a global center for the coffee industry through the location of Jazan, especially with the export ports between Asia and Africa.
Turkey, the UAE, and Malaysia are among the largest exporters to the Kingdom, and they are all non-producing countries but reproduce and export.
- Complex and Museum
Director of the Jazan Mountain Development Authority Dhafer al-Fahad explained that authorities continue to develop crops suitable for the climate of the mountainous governorates and coffee seedlings.
He added that 900,000 coffee seedlings would be distributed for research in the coming years.
The Authority established a statistical database for all coffee growers in Jazan that is updated periodically. It has also founded the Saudi Coffee Center in cooperation with Saudi Aramco.
In addition, it created an automated nursery to increase the production capacity of coffee seedlings to 800,000 annually.
Fahad announced the Culinary Arts Commission intended to establish the Saudi Coffee Museum in partnership with the Ministry of Culture and that the Kingdom had joined the World Coffee Organization.
