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The UAE and India ink agreement to launch a food trade route

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What we're tracking today

TODAY: UAE and India sign pact on food trade route + PMI reports from Kuwait, Qatar, and Lebanon are in

Good morning, folks. It’s a fairly busy news day with updates on the UAE trade and cargo connectivity front, along with PMI readings from Kuwait, Qatar, and Lebanon. We also have the latest readings from the liner shipping connectivity index and what that means for our region. Let’s get the ball rolling.

WATCH THIS SPACE-

#1- Bahrain’s flag carrier Gulf Air aims to become profitable within the next three years, Zawya reports, citing comments made by CEO Jeffrey Goh to Airline Routes & Ground Services. The airline aims to boost its current fleet network — which boasts 40 aircraft — with six more A320s and two B2787s to ensure operational efficiency and expand its network by 25% over the next five years, adding new destinations east and west of its current network. Recent additions include Shanghai, Guangzhou, Munich, Baghdad, Rhodes, and Geneva.

#2- Egypt aims to launch infrastructure projects to encourage engagement by the private sector, according to a statement. Egypt is specifically looking to encourage investments in solar energy tech, semiconductor manufacturing, outsourcing services, and data centers. Egypt is also making moves to cut down on trade barriers, streamline customs procedures, and boost logistics infrastructure to better connect with international markets, Egyptian Investment and Foreign Trade Minister Hassan Al-Khatib said on the sidelines of the Center for International Private Enterprise Conference yesterday.

Also in the pipeline: The ministry is working on a number of policies to help the Madbouly government reach its growth target of 6-7%, up exports to USD 145 bn by 2030 by drumming up private investments worth USD 240 bn. The policies will be inflation-oriented and will prioritize increasing the private sector’s involvement in the economy. They will also aim to support foreign trade.

El Khatib also laid out some of the state's investment priorities at the conference, pointing to industry, healthcare, agriculture, energy, and tourism. The minister also highlighted hydrogen production and energy storage as a priority, along with solar technology, microchip production, data centers, and outsourcing services.

#3- LNG tankers are diverting from Asia to Europe after concerns over the escalating conflict in the Middle East caused a surge in benchmark Dutch prices, Bloomberg reports. Three LNG vessels from the US altered course after originally planning to head for Asian destinations, and two ships headed for Bangladesh and South Korea were rerouted to the UK and Belgium respectively, Bloomberg said, citing data from Kpler. The diversions are in response to a spike in European futures, pushed up by worries over growing risk to supplies available in the Middle East.

No shift in demand: Traders indicated that the diversion of cargoes was primarily a response to price changes rather than significant shifts in demand. Since mid-September, Dutch gas futures have increased by as much as 29%.

#4- Indian firms eye DP World’s Bharat Mart: DP World has attracted interest from some 9k Indian businesses looking to establish operations in Bharat Mart, a warehousing and trading hub in Dubai designed for India’s MSMEs, CNBC TV18 reports, citing Indian Commerce and Industry Minister Piyush Goyal. The facility, located in DP World’s Jebel Ali Freezone, will span 100k square meters and include 1.4k units.

Background: The foundation stone for the project was laid earlier this year. Set to open in 2026, the marketplace aims to streamline access to global markets for Indian manufacturers and exporters.

MARKET WATCH-

#1- Oil prices fell over USD 1 in early morning trading amid fears MENA is on the brink of a regional war, Reuters reports. Brent crude futures fell USD 1.17 trading at USD 79.76 a barrel at 04.20 GMT, while US West Texas Intermediate (WTI) futures fell USD 1.19 trading at USD 75.95 a barrel. Both contracts rose over 3% yesterday, reaching their highest levels since late-August due to worries over disrupted oil supply from the Middle East.

#2- Baltic index stays low: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — fell 1.1% to 1,907 points on Monday, registering their lowest since 18 September. The capesize index dropped 2.5% to its lowest since mid-September at 3,161 points, while the panamax index gained 27 points to 1,415 points. The smaller supramax eased one point at 1,257.

DATA POINT-

#1- Qatar’s Hamad Port breaks its transshipment record: QTerminals’ Hamad Port broke its record for highest volume of transshipment containers handled, reaching over 254k TEUs in the first three quarters of 2024, according to a statement.

#2- Investments in Oman’s economic zones up 20% in H1 2024: Investments in Oman’s special economic zones, freezones, and industrial cities rose by 20% y-o-y to OMR 20.1 bn in the first half of this year, according to a statement. Some OMR 7.5 bn were invested in Oman’s operational industrial cities, OMR 4.6 bn in Salalah Freezone, OMR 6 bn in SEZD, OMR 1.3 bn in Sohar Freezone, OMR 459.2 mn in Khazaen Economic City, and OMR 198 mn in Mazyunah Freezone.

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***

CIRCLE YOUR CALENDAR-

Bahrain will host the Routes World forum from Sunday, 6 October to Tuesday, 8 October. The event will bring together VPs and network planning heads from some 250 carriers to discuss global air route networks.

Saudi Arabia will host the Global Logistics Forum from Saturday, 12 October to Monday, 14 October in Riyadh. The forum will gather key industry players, government officials, and industry experts to discuss optimizing operations and driving growth in the logistics sector. The event will take a specific look at how the sector can adapt with regards to global climate change and incorporate sustainability into their supply-chain operations.

Saudi Arabia will host the Global Airport & Aviation Forum from Wednesday, 16 October to Thursday, 17 October in Jeddah. The forum will bring together aviation leaders and experts to discuss future projects in the aviation industry, including new airport developments, capacity upgrades and expansions, new aircraft orders, and important airport services.

Saudi Arabia will host the Smart Ports & Logistics Transformation Summit on Monday, 21 October and Tuesday, 22 October in Riyadh. The two-day conference aims to discuss strategies, innovation, and technologies in line with Saudi Arabia’s Vision 2030, which aims to position KSA as a logistics hub in the MENA region.

The UAE will host the International Conference on Tourism, Transport, andLogistics on Saturday, 26 October and Sunday, 27 October in Dubai. The event will gather scientists, scholars, and engineers from around the world to discuss new ideas and research development projects in the industry.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

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Trade

The UAE and India ink agreement to launch a food trade route

A new trade corridor for the UAE: The UAE and India agreed to set up an India-UAE food corridor serving the UAE and neighboring regions by building food processing facilities and food parks in India, Indian news outlet ANI News reports India’s Commerce and Industry Minister Piyush Goyal as saying at the India-UAE high-level task force meeting on investment in Mumbai. The UAE funneled an initial USD 2 bn commitment into the initiative.

The details: The investment will be geared towards building infrastructure — including food processing units and food parks — to support both Indian farmers and agribusinesses, and ramp up Indian agriculture exports to the UAE and the broader Middle East. The project is expected to be rolled out over two or two and a half years, with a small working group comprising Indian central and state governments, as well as UAE officials, formed to handle the project.

This has been in the works: “It has been under discussion for a very long time that UAE would like to invest in setting up food processing facilities in India to enable the availability of high-quality products suitable to the UAE taste in India using Indian farmers' products and to be sold in the UAE,” Goyal said.

The UAE and India also discussed ramping up bilateral cooperation in data centers and artificial intelligence, and co-investments in renewable energy and transmission infrastructure in India during the meeting.

The India-UAE joint committee is set to meet next week to address rising business concerns, CNBC TV18 reports, citing comments made by Goyal.

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Purchasing

Kuwait and Qatar non-oil activity sustain growth in September, while Lebanon’s outlook remains somber amid security challenges

How Kuwait, Qatar, and Lebanon’s non-oil private sectors performed in September: Purchasing manager indices (PMI) tracking non-energy sectors in Kuwait, Qatar, and Lebanon told a mixed tale in September. Kuwait held slightly above the 50.0 mark threshold, while Qatar took a slight dip below the threshold despite overall business improvements. Over in Lebanon, security concerns and regional tensions continued to push down business activity to its lowest since December 2021.

REMEMBER- The all-important 50.0 mark is the threshold separating contraction from growth. Anything above 50 denotes expansion, while anything below indicates contraction.

First up, Kuwait: Kuwait’s PMI recorded marginal improvement in business conditions in September as new orders, output, employment, and purchasing slightly grew, albeit at a steady pace, according to Kuwait’s S&P Global PMI (pdf). The country’s headline number inched up to 50.3 in September, sustaining a slight improvement from being below the 50.0 no-change mark in August.

It was all about the race: Competitive pressures remained at the forefront, with Kuwaiti firms struggling to secure new business, indicating limited expansions in new orders and output rates. Firms marginally increased their selling prices in the face of competition, despite marked rise in input costs.

Subtle expansions in output + new orders: Output charges recorded a slight increase in September, reportedly driven by competitive pressure. The rate of expansion softened to its weakest pace in 20 months, although firms that were able to offer discounts saw a boost in their activities. New orders ticked up on the back of price reduction and marketing efforts, expanding at a gradual pace slightly faster than August. New exports also continued to rise solidly, although the growth rate was at a one-year low.

The job market is steady: Firms increased hiring at a marginal pace in September compared to the slight fall in employment back in August, indicating reduced pressure on capacity. Backlogs remained unchanged, ending a 19-month accumulation, but machinery faults and staff shortages meant increased backlogs for some firms.

Inflation persisted despite a rise in input costs: Overall input prices rose amid higher costs, mainly centered on the back of purchase activity as staff costs only slightly increased during the month. Firms were faced with a surge in purchasing costs, yet input buying markedly increased. Stock purchases grew, a reversal of its pause back in August. Suppliers’ delivery times were reduced, driven by competition among vendors.

Qatar told a mixed tale: Qatar’s non-energy private sector signaled sustained growth in business conditions in September, with boosts to employment rates and new orders despite a slight decrease in purchasing activity and a pause in output, according to Qatar Financial Center’s PMI (pdf). Qatar’s headline number eased to 51.7 in September, down from 53.1 in August and slightly below the long-run trend level of 52.3.

The appetite for goods and services continued to increase, leading to an expansion in business operations. The 12-month outlook for activity strengthened to its highest since March 2023. Although cost pressures recorded their highest in over four years, charges for goods and services fell sharply.

Employment saw a record high: Employment rates were the largest contributor to the headline figure in September, as the non-energy private sector expanded its workforce at the fastest rate on record, exceeding its previous January 2019 peak. The boost in job creation reflected business expansions, although total business activity dampened.

Some businesses rose, some paused: Output saw a pause in the construction sector, but activity rose across the manufacturing, services, finance, as well as wholesale and retail sectors. Although September saw a rise in new businesses, purchasing activity softened as firms reported broadly stable inventory holdings.

Lebanon is in trouble: Lebanon’s non-energy private sector activity slumped to a 33-month low in September, weighed down by a sharp decline in output and new orders due to escalating geopolitical tensions and growing security concerns, according to Blominvest Bank’s Lebanon PMI (pdf). September’s readings saw its headline figure fall to 47.0 in September, down from 47.9 in August.

Limited domestic demand for essential goods drove a large decline in output, new orders, and new exports. Output prices surged as international buyers diverted away due to increased shipping costs and supply chain disruptions, which surged purchasing price inflation to a three-month high.

Business activity decreased at large across Lebanon, with several firms lowering their buying activity, albeit at a softer pace than in August. Stocks of purchased items remained unchanged after three consecutive months of inventory growth. The slowdown in procurement activity parallels an uptick in purchase prices, primarily affecting shipping costs. Input changes surged to their quickest pace in three months, and output charges marginally climbed up.

A silver lining? Employment levels remained broadly stable, in line with a trend seen during the past months in summer 2023.

A bleak forecast for Lebanon: Rising regional tensions continue to pummel confidence. “Lebanon stands at a pivotal moment, desperately needing stability to revive its struggling economy, without much hope of attaining it soon,” research analyst Mira Said said in the Blom report.

Sentiment remained high in Kuwait + Qatar: Kuwait’s non-oil outlook in September remained strong, as the boost in confidence predicted a rise in business activity in the upcoming year. Meanwhile in Qatar, the next 12 months rest on a strong outlook as firms eye investments in key sectors and a boost in consumer demand.

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The Macro Picture

Liner Shipping Connectivity fluctuates in 3Q as the region continues to feel the impacts of Red Sea tensions

The Liner Shipping Connectivity Index paints a mixed picture for the region in 3Q as Red Sea ports continue to feel the impacts of ongoing conflict, according to recent data from the United Nations Conference on Trade and Development’s Liner Shipping Connectivity Index. The index tracks countries’ connectivity to the global containerized shipping network by collating data on the number of direct connections, weekly calls, companies providing services, services available, total deployed carrying capacity, and the size of largest ships received, according to UNCTAD’s methodology.

ICYMI- We looked into how Liner Shipping Connectivity declined in regional countries reliant on Red Sea trade in 2Q 2024, with drops seen in the UAE, KSA, and Israel in August.

The UAE recorded the biggest gain, albeit still rising at a sluggish pace, growing by some eight points q-o-q to settle at 304.2 points in 3Q. It also gained one point in the rankings to 15th in this year’s third quarter, after falling a point in the last.

Saudi Arabia saw connectivity marginally rise this month, gaining some five points q-o-q to 236.9 points in 3Q 2024, after taking the hardest hit last quarter and falling 17 points. The Kingdom maintained its spot in the ranking at 24.

Israel was the hardest hit: The country’s shipping connectivity fell by some 10 points q-o-q to 79.3 points in 3Q 2024, as regional tensions escalated and Yemen’s Houthis continued to target Israel-linked or Israel-bound shipping in the Red Sea. It has also seen an overall steep drop of over 70 points from 150 points the same time last year. As a result, Israel’s rankings on the index slipped three places in the rankings to 61 globally in 3Q. Israel’s key ports, including the Mediterranean’s Haifa and the Red Sea port of Eilat continue to be targeted by Iranian proxies.

REMEMBER- Maritime security firms raised the risk level for ships calling at Israeli ports in September, as terminals face the possibility of missile attacks from Lebanon’s Hezbollah and Yemen’s Houthis. British maritime security company Ambrey assessed the risk to vessels calling at Israeli ports to be “elevated,” and top ship industry associations have urged ship operators to “limit information access” at Israeli ports.

Jordan’s connectivity slipped, shedding some eight points q-o-q to 56.3 points in 3Q, with operations at Aqaba port, the country’s only maritime gateway, severely impacted by Red Sea disruptions and escalating regional tensions. The country also fell 12 points in the rankings to settle at 83, its second lowest place in the history of the index.

Egypt’s connectivity dropped after gaining almost 10 points in the last quarter, dipping by some six points q-o-q to sit at 238 points in 3Q from 244 points in Q2. Egypt held its spot in the country rankings, however, settling at 23 worldwide in terms of its liner shipping connectivity. The decision by major carriers to reroute across the Cape of Good Hope saw Suez Canal transits fall this year, leaving Egypt in a worse state financially.

Suez Canal revenues have seen a 50-60% drop — equivalent to USD 6 bn — over the past 7-8 months. Back in July, Egyptian Prime Minister Moustafa Madbouly said Suez Canal revenues had dropped to around USD 300 mn a month, down 64.7% from USD 850 mn previously.

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Diplomacy

The UAE and Norway agree to boost air transport services

UAE-Norway strengthen trade ties: The General Civil Aviation Authorities of the UAE and Norway have inked an agreement to enhance air transport services between the countries in a bid to support trade and increase cargo air traffic, Wam reports. The agreement was signed during Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan’s meeting with Norwegian Prime Minister Jonas Gahr Støre, where talks centered on enhancing economic, trade, and investment cooperation across key sectors. Al Nahyan also met with Crown Prince Haakon Magnus in Oslo to discuss advancing bilateral collaboration, the state news agency reported.

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Also on Our Radar

UAE’s DP World and Dubai Chambers partner to boost global investments

TRADE-

DP World + Dubai Chambers to collaborate on expanding global investment: Dubai Chambers has signed an MoU with DP World to use the company’s extensive global network and facilities to set up and host international offices in the firm’s existing global locations, Wam reports. The move aligns with Dubai’s Global initiative, which looks to develop 50 international representative offices globally by 2030 to pull in foreign direct investment. The partnership “will contribute to achieving the goals of the Dubai Global initiative and support [the UAEs] efforts to drive increased trade and investment,” said Dubai Chambers Chairman Abdul Aziz Al Ghurair.

OTHER STORIES WORTH KNOWING THIS MORNING-

  • Tunisia + Vietnam cooperate on trade: The Vietnam Trade Office in Algeria and Tunisia and the Tunisian Union of Industry, Trade, and Handicrafts (UTICA) held a conference from 30 September to 4 October to connect Vietnamese businesses with their Tunisian counterparts. (Vietnam Plus)
  • Jordan’s airport revamp project mostly complete: Jordan’s Amman Civil Airport has completed 75% of its rehabilitation project, which aims to upgrade infrastructure including the runway and power stations. (Almamlaka TV)
  • Algeria + Niger + Tunisia + Libya to launch freetrade zone: Algeria will establish a freetrade zone with Niger, Tunisia, and Libya to prevent speculation in goods. President Abdul-Majeed Tebboune has also said that Algeria is not considering joining any blocs at the moment, as its main focus is on developing a robust economy that can shield it from global fluctuations. (Libyan News Agency)
  • Etihad Cargo bags Logistics News ME award: Etihad Airways’ logistics arm Etihad Cargo has bagged the Air Cargo Operator of the Year for 2024 at Logistics News ME’s Logistics and Transport Award. (Statement)
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Around the World

Boeing relaunches wage negotiations as production hub strike enters fourth week

Boeing is returning to the negotiating table two weeks after talks failed to resolve a labor strike at the company, with a federal mediator summoning representatives from Boeing and trade union International Association of Machinists (IAM) District 751 to relaunch talks yesterday, Bloomberg reports. Each day of the strike, which is entering its fourth-week, is costing the plane manufacturer some USD 100 mn in lost sales. Workers lost their access to company-backed healthcare benefits last week.

Where they stand: A second round of wage talks broke down with no progress last week. The strikers are looking for a 40% pay rise and the reinstatement of a defined-benefit pension. The aircraft manufacturer said that it made its “best and final” offer two weeks ago, which would have given workers a 30% raise over four years and restored a performance bonus. However, the strikers rejected the offer as insufficient.

ICYMI- Boeing started implementing a hiring freeze and considered furloughs last month, as the aviation giant scrambled to cut costs amid the 30k-worker strike, which is taking place at Boeing’s 737 Max Jets production hub. This is worsening the company’s already existing supply chain issues and delivery delays, pushing it to stop issuing purchase orders for the 737, 767, and 777 jets to preserve its credit rating.


BP has backtracked on its ambitious goal to slash oil output by 40% before 2030, Reuters reports, citing three sources with knowledge to the matter. Investors’ skepticism about the profitability of the company under its ambitious transition strategy has been building up for some time. Last February, the company downgraded its target to 25% before dropping it altogether. Most recently, last July, BP paused development on new offshore wind projects.Despite abandoning the ambitious goal, BP’s net zero 2050 target is still intact.


OCTOBER

6-8 October (Sunday-Tuesday): Routes World 2024, Bahrain.

8-10 October (Tuesday-Thursday): The Global Rail Transport Infrastructure Exhibition and Conference(Global Rail), Abu Dhabi, UAE.

7-9 October (Monday-Wednesday): AFSIC – Investing in Africa, London, UK.

8-10 October (Tuesday-Thursday): AntwerpXL Expo, Antwerp, Belgium.

12-14 October (Saturday-Monday): Global Logistics Forum, Riyadh, Saudi Arabia.

13 October (Sunday): International Transport Workers’ Federation (ITF) Congress, Marrakesh, Morocco.

16-17 October (Monday-Tuesday): Global Airport & Aviation Forum, Jeddah, Saudi Arabia.

21-22 October (Monday-Tuesday): Smart Ports & Logistics Transformation Summit, Riyadh, Saudi Arabia.

22-24 October (Tuesday-Thursday): Asean Ports and Logistics, Johor, Malaysia.

22-24 October (Tuesday-Thursday): Global Ports Forum, Singapore.

26-27 October (Saturday-Sunday): International Conference on Tourism, Transport, and Logistics, Dubai, UAE.

NOVEMBER

11-12 November (Monday-Tuesday): World Advanced Manufacturing Logistics Summit & Expo, Riyadh, Saudi Arabia.

11-12 November (Monday-Tuesday): Saudi Airport Exhibition, Riyadh, Saudi Arabia.

11-14 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi, UAE.

13-15 November (Wednesday-Friday): The Bahrain International Airshow, Sakhir Airbase, Bahrain.

13-15 November (Wednesday-Friday): ITC North-South - New Horizons, Astrakhan, Russia

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck Show, Damman, Saudi Arabia.

19-21 November (Tuesday-Thursday): Saudi International Maritime Forum, Dammam, Saudi Arabia.

18-19 November (Monday-Tuesday): G20 Summit, Rio de Janeiro, Brazil.

20-21 November (Wednesday-Thursday): Saudi Rail Exhibition, Riyadh, Saudi Arabia.

DECEMBER

2-3 December (Monday-Tuesday) Wings of Change Middle East, Riyadh, Saudi Arabia.

10-11 December (Tuesday-Wednesday): Rail Industry Summit, Casablanca, Morocco.

10-12 December (Tuesday-Thursday): Middle East Business Aviation, Dubai, UAE.

20 December (Wednesday): The Iran-Senegal Joint Economic Cooperation Commission, Dakar, Senegal.

EVENTS WITH NO SET DATE

IATA Annual General Meeting (AGM) and World Air Transport Summit, New Delhi, India.

1H 2024: Civil Construction subcontracts for construction firms in Oman for implementation of the Abu Dhabi - Suhar rail link to be announced.

2H 2024: Bahri’s barges for Saline Water Conversion Corporation (SWCC) to begin initial and commercial operation.

King Salman Energy Park is set to become operational.

The Cross-Border Digital Trade Forum, Dubai.

2025

FEBRUARY

4-5 February (Tuesday-Wednesday): Seatrade Maritime Qatar, Doha, Qatar.

APRIL

16-17 April: Global Ports Forum, Dubai, UAE.

Mid-2025: Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

AD Ports-operated Safaga Port’s multi-purpose terminal will become operational.

Phase 3 of APM Terminals Tangier MedPort to be complete and operational.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

1Q 2025: Phase twoof Jafza Logistics Park to be completed.

NOVEMBER

4-6 November: The International Air Cargo Association TIACA’s Air Cargo Forum 2025, Abu Dhabi, UAE.

2026

2026 UNCTAD Global Supply Chains Forum, Saudi Arabia.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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