Saudi Arabia Fruits and Vegetables Market - Growth, Trends, and Forecasts (2023 - 2028)

Saudi Arabia Fruits and Vegetables Market - Growth, Trends, and Forecasts (2023 - 2028)

The Saudi Arabian market for fruits and vegetables is expected to register a CAGR of 5.2% during the forecast period.

For the past few years, Saudi Arabia has been one of the largest markets for agriculture in the GCC region. Food security initiatives by the government, the shift toward greenhouse production, and the rising demand for a healthy diet are the major factors expected to drive the market's growth during the forecast period.

With increasing urbanization, higher disposable incomes, and increased awareness about healthy diets, people are shifting to healthier diet plans. This has boosted the demand for organic food over the past few years. Furthermore, the population in urban cities is gradually becoming more aware of the origin and type of food consumed. The fruits and vegetables grown locally are more popular in the country. Although priced higher than imported ones, the demand is still significant.

Dates and watermelons are the most widely produced fruits, while potatoes and tomatoes are the most widely produced vegetables in Saudi Arabia. The demand for these crops is anticipated to continue growing, supported by the country’s rich oil-based economy, increased westernization and disposable income of Saudi households, and rapidly expanding retail trade, stimulating consumption.

The increasing presence of superstores and hypermarkets has increased access to high-quality fruits and vegetables for the Saudi population. As many of these retailers adopt strategies, including optimal pricing strategies, to capture the market, the demand among consumers is increasing.

Adverse climatic conditions such as high temperatures and prolonged dry spells have led to Saudi Arabia's dependence on the imports of fresh produce, such as vegetables. In aiming for self-sufficiency in vegetable production, the Saudi Arabian government has been promoting technologies such as drip irrigation and protected cultivation. This has led to increased production in the country. According to FAOSTAT, fruit production in Saudi Arabia accounted for 2,370,735.0 metric tons in 2017 and reached 2,913,925.0 metric tons in 2020. Such initiatives are expected to reduce Saudi Arabia’s dependence on imports and boost domestic production in the country.

As reported by the Ministry of Commerce, Saudi Arabia’s production of fruits witnessed an increase of 194% in six years, reaching 2.7 million metric tons by the end of 2020. Dates are at the top of the list of Saudi fruits and are one of the major fruits propelling agriculture growth. The country ranked second in the world in the production of dates, with 1.5 million metric tons in 2020.

For Saudi Arabia, food security has been a national strategic objective for many years and is part of the Saudi Vision 2030. The expanding focus on food security in the country has resulted in the increased domestic production of food crops and, eventually, an increased area under production to minimize the import dependency on food. The country’s Agricultural Development Fund (ADF) is key to this, which plays a pivotal role in overseeing and supporting KSA’s agriculture sector.

Several government policies in the wake of food security have propelled the growth of the fruit and vegetable sector in recent years. For instance, the Saudi Arabian Agricultural Bank (SAAB), a government agency, offers subsidies to small and medium land-holding farmers, credits interest-free loans, and financially supports the growers. In addition, in 2021, the Saudi Agriculture Development Fund approved several loans worth over USD 229 million to finance working capital for importing agricultural products to strengthen food security in the country.

According to the International Trade Centre, Saudi Arabia ranked first globally in date exports in 2021. The value of Saudi date exports in 2021 reached USD 320 million. Further, the country also witnessed the highest annual growth rate of exports over the past five years, at 12.5%, with exports entering 113 countries. Despite the desert terrains, low rainfalls of 40-100 mm, lack of natural water bodies, and groundwater level, the country has achieved self-sufficiency in date production, exporting dates to neighboring countries.

Further, the Saudi Vision 2030 has placed a lot of attention on the palm and date sector through its development and sustainability, working early to prepare and implement programs to develop this sector and increase its contribution to the GDP. The value of palms and dates in Saudi Arabia is almost 12% of the agricultural gross product and 0.4% of the non-oil gross product.

Moreover, the high production and export reflected the interest of the Saudi leadership in enhancing non-oil exports, developing the work system for planting and improving the production of palm, and the leading role of partners, mainly the producers and exporters of dates. In addition, Saudi traders benefit from the growing international demand for dates. The export of dates is expected to increase during the forecast period.

Vision 2030 aims to invest primarily in food and crops and make the dates sector one of the most important sectors that attract national investments. In 2021, Saudi Arabia launched a global electronic platform for dates as a way to introduce international investors to the different types of fruit being produced in the country.

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