The Saudi Arabia aquaculture market is evaluated at US$503.225 million for the year 2019 and is projected to grow at a CAGR of 7.98% to reach US$861.448 million in 2026.
Aquaculture extensively alludes to the cultivation of aquatic organisms in controlled aquatic conditions for any commercial, recreational or public motive. The reproducing, raising, and harvesting of plants and animals happens in a wide range of water environments including ponds, rivers, lakes, the ocean, and man-made “closed” systems on land. Saudi Arabia has been one of the top producers and exporters of seafood internationally mainly because of the favorable environmental conditions. According to the Food and Agriculture Organization, of Saudi Arabia’s total of 7,572 km coastline, around 2,400 km is suitable for aquaculture development along the Red Sea in the west and the Arabian Gulf in the east. The growth of the Aquaculture market in Saudi Arabia is mainly attributed to the growing government support of the market. The high consumption of seafood by the people in the country further fuels the growth of the market. Fishing bans and a decline in employment by the sector are the restraints to the growth of the aquaculture market in the country.
The government of Saudi Arabia has constantly tried to support the aquaculture market in the country. Vision 2030 was declared by the government in Saudi Arabia whereby the initiative by the Ministry of Environment, Water, and Agriculture claims for expanding Saudi Arabia's aquaculture sector to 600,000 metric tons of production by 2030 through simplified licensing for aquaculture and adoption of best aquaculture practices. This program mainly focuses on the sustainable expansion of aquaculture in the country. The government also wishes to ensure high product safety and traceability standards. The government intends to raise the fish production to reach 600 thousand tons by 2030 to sustain 65% of domestic demand and decline production costs by 30%. The favorable government incentives with their plan to increase investments are the key growth driver of the aquaculture market in Saudi Arabia.
High consumption of seafood as a considerable staple of the diet of people in Saudi Arabia is expected to further propel the growth of the aquaculture market in the country. This is mainly due to the macroeconomic parameters like the rising per capita income of the consumers and increasing consumption expenditure. The consumption expenditure of the people of the country has consistently grown from the year 2016 when the consumption expenditure was 442.69 billion to 497.864 billion in 2019 as per the World Bank Data Base. Additionally, the surging domestic household demand for seafood also hints at the growth prospect of the aquaculture market in Saudi Arabia.
In the past decade, the dietary preferences and food habits of the consumers of Saudi Arabia have changed significantly. Owing to economic growth and inclining health-conscious, consumers are demanding high-quality protein-rich food. This further points towards the increase in demand for seafood and inclining the market size of the aquaculture market in Saudi Arabia.
The consumers in Saudi Arabia have undergone a change in their purchasing methods, people are steadily shifting towards online purchasing. The increased use of e-commerce platforms is expected to increase the sale of seafood in the country. Coupled with that, due to the restrictions imposed in the country in the wake of the Covid-19 pandemic, the consumers further shifted their buying behavior. The online purchases of food products had skyrocketed significantly from 6% to 55%. The high demand for food products exhibits the growing trend of online retailing in the country providing an opportunity for growth of the aquaculture market.
Moreover, continuous Research and Development along with increasing foreign investment in the market further hint at the promising aspects for the growth of the aquaculture market in Saudi Arabia.
Recently, in January 2020, the four aquaculture companies of Saudi Arabia namely Jazan Energy and Development Company (Jazadco), Tabuk Fisheries Company, Tharawat Seas, and Aquaculture Sharq Farms decided to merge into Advanced Aquaculture Company in a deal of $133 million to contribute to achieving the ministry’s goals in raising the productivity of local aquaculture as mentioned by Abdulrahman al-Fadhli, Minister for Environment, Water and Agriculture.
The extreme meteorological and hydrological conditions in the country pose a hindrance to market growth. The fishing bans imposed by the government further restrain the market growth. Additionally, the decline in employment by the sector coupled with the presence of local giants poses a challenge to the new entrants in the aquaculture market in Saudi Arabia.
The Market is segmented into Shrimp, Tilapia, and others based on type. Tilapia is further categorized into Sabaki Tilapia and others. Based on the Production system, the market is fragmented into Aquaponics, Hydroponics, and Aeroponics. Aquaponics is further divided into Tilapia and others. By End User, the market is studied across Resident and Commercial. By Province, the market is segmented into Jeddah, Riyadh, and Others.