By Ashan Silva, Commercial Director at GAC Oman – Sohar
2021 has been an eventful year for the dry bulk cargo industry. According to Simpson Spence Young’s 2022 Outlook Report, revenues for ships of all major bulk carrier sizes hit 13-year highs last year as global economies recovered from the pandemic-reduced crisis, leading to strong growth in demand. In many places, the outlook is optimistic, including in Sohar, where dry bulk shipments to the port of Oman are expected to see significant growth in 2022 as local sugar and flour production increases.
The increased production is part of Oman’s food security initiative which includes 128 projects announced by the Ministry of Agriculture, Fisheries and Water Resources in October 2021. The projects will be implemented in over the next five years and will include an initiative to promote imports and exports through Omani ports.
Construction of a sugar refinery and a food processing cluster is underway at Sohor port and in the free zone. The refinery, about to be commissioned, will be the Sultanate’s first sugar refinery. Its initial capacity will be 700,000 tons of refined sugar per year and should reach one million tons in the second phase of the project. Increased shipments of raw materials and finished products will improve shipping activities through Sohar Port.
Wheat silos are also being built as part of the food security initiative. The production of all types of flour and their distribution in Oman and neighboring countries is already underway, and the new silos soon to be commissioned will add an additional 160,000 tonnes of capacity.
Meanwhile, military action in Ukraine is also likely to impact local port activity and imports of this product to Oman, one of Ukraine’s main wheat buyers.
Shipping of other bulk cargo continues at a steady pace. The export of aggregates is growing via the Steinweg terminal in Sohar. Various sizes of aggregates, ranging from five to 40 millimeters, are exported to Qatar, Bahrain, Kuwait, Bangladesh and other countries. The export capacity ranges from 600,000 to 1,000,000 metric tons per month.
Vale operates one of its largest pellet plants in Sohar and imports iron ore fines and exports pellets to various destinations including Egypt, Abu Dhabi, Saudi Arabia and Malaysia. Occasionally, Vale Oman imports coal for its operations. Additionally, Oman Oil Refineries and Petroleum Industries Company exports petroleum coke to Gulf Coast countries as well as international markets such as India, UAE, Kuwait, Switzerland and Egypt.
Sohar International Urea & Chemical Industries began operations in 2009 and currently produces approximately 1.3 million metric tons of granular urea per year. The company exports its products to international markets such as the United States, India, Thailand, Africa and Latin American countries.
In January 2022, the Oman Chamber of Commerce and Industry met with representatives from the Netherlands to discuss partnerships to boost trade and investment. Oman will benefit from Dutch experience in port development and modernization, offering Dutch businesses the opportunity to take advantage of Oman’s strategic location on international shipping routes and its proximity to emerging markets in Asia and from Africa.
GAC’s operations around the world are generally optimistic about the dry bulk outlook and expect tight vessel supply and strong demand to continue to be enduring features of the market.
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