Business

The future is looking bright for trade in the United Arab Emirates and Dubai. Following several new initiatives over the past year, the region has exciting plans to expandTradingin oil, gold, and diamonds.

A new trading body has recently been formed, ADNOC Global Trading, comprising Dubais Abu Dhabi National Oil Company, together with Austrias OMV and Italys ENI. OMV will hold a 15% stake in the new group, while ENI will have 20%. The new body will begin trading crude products including gasoline from the port of Fujairah from 2020. It also has ambitious plans to open the largest underground oil barrel storage facility in the world. It is anticipated that by 2022 the facility will hold 42 million barrels of crude oil. Currently the UAE exports around 3 million b/d of crude oil.

There are also plans to transport products from Ruwais, the location of ADNOCs major refinery, to the Port of Fujairah. It is hoped that the move will attract others to trade in the region, as Aramco Trading has opened offices in Fujairah recently. Being based there has the major advantage of being outside the Strait of Hormuz, where attackers have been known to strike oil tankers.

State-owned ADNOC is also hoping to link the pipeline which carries its flagship product, Murban Oil, to the Fujairah port, providing access to the VLGC jetty in addition to other terminals. In order to cope with the increased demand, the port is planning to expand by 700,000 square meters next year, also adding more berths in addition to extending the pipeline.

A new policy to support gold trade in the UAE has also recently been rubber stamped, according to news agency, Wam. Gold and jewellery trade currently account for 20% of theUAEs Non-Oil Exports.The policy will strengthen the regions position as a global hub for jewellery exports. The 10 new initiatives will include governance of the market for gold, supply tracking, and international marketing strategies.

It will also cover off technology use in gold manufacturing, and the development of an internationally recognised UAE gold standard. The Dubai Media Office has recently reported that trade in gold, diamonds and jewellery increased 3% in the first half of 2019, totalling dh 180 billion. This further demonstrates the potential for expansion in this sector in the UAE.

Diamond exports are also an important contributor to the UAEs economy, and an ambitious plan to open the worlds largest diamond trading floor will cement the future of trade in the region. The new facility will have the capacity to host 200 buyers at a time and will hold 41 secure trading tables. It will be located at theDDE (Dubai Diamond Exchange)at Almas Tower.

The DDE is renowned and trusted among the worlds diamond experts as a professional, well-regulated and safe place to purchase the gems. The planned expansion of the DDE is will help UAE steal some market share in diamond trade from other established centres such as Chicago, Antwerp and Amsterdam. The DDE also plans to host sales of other precious gems such as sapphires and rubies.

Overall sales of diamonds were impacted slightly in 2018 due to the VAT introduction in January, which was lifted in a u-turn move in May.

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