Abu Dhabi plans trading house for food security
Singapore, November 17, 2010
Abu Dhabi plans to set up a trading house with a capital base of several hundred million dollars in a bid to secure food supplies for the import-dependent nation, the Financial Times reported.
Citing people familiar with the plans, the newspaper said the government-owned Abu Dhabi Sources also aims to capture profit margins in metals and agriculture trading.
For the past three months, it said, the firm has been wooing senior traders in the European trading hubs of London and Geneva to build up staff.
The move is designed to secure Abu Dhabi's flow of imports even in the event of disruption in the Strait of Hormuz, the Gulf's key waterway, which could be affected by any military confrontation with Iran, the paper said.
Abu Dhabi, home to 95 per cent of the hydrocarbon reserves of the United Arab Emirates, is transforming itself into a global city and has kicked off ambitious infrastructure plans worth more than $300 billion that require a huge flow of raw materials.
As part of its food security strategy, Abu Dhabi is building silos in the smaller emirate of Fujairah, the paper added, but it was not clear if the new firm would trade in oil.
Commodities prices have rocketed in the past six years, fuelled by demand from China and other emerging markets, driving up metals such as iron ore 38 per cent this year, with foodgrains such as corn and wheat up 28 per cent and 17 per cent respectively.-Reuters