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Wed 17 Nov 2010 09:37 AM

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Abu Dhabi plans trading house for food security

Import-dependent nation also aims to capture profit margins in metal and agricultural trading

Abu Dhabi plans trading house for food security
Ripe wheat waits to be harvested in fields at the start of harvesting on August 9, 2010 in Chebsey near Stafford, United Kingdom. Wheat prices have risen 25% in the last seven days due to drought and grass fires across much of Europe and beyond. Russia has banned the export of grain as it tries to preserve stocks. (Getty Images)

The Middle Eastern emirate of

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 percent 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 $300bn 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 percent this year, with

foodgrains such as corn and wheat up 28 percent and 17 percent

respectively.

 

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Gloria 9 years ago

It would be nice to have a primary trader in the Emirates. Would open up a good trade platform for the region