SOMA Newsletter

Author

Soma Mater
February 10, 2025

Welcome to the SOMA MATER weekly newsletter.

At SOMA MATER, we specialize in delivering comprehensive research and advisory services with a focus on Food & Water Security and Net Zero Transition in the MENA Region. In order to support our subscribing clients in navigating these topics and understanding the regional narrative, we produce monthly Food and Water Security and Net Zero Transition Intelligence Reports, along with our in-depth analysis and insights.

This weekly newsletter highlights the top 3 stories from the past week in Food and Water Security and Net Zero transition, along with SOMA MATER's analysis and perspective.

What is the current status of the global fertilizer market dynamics, particularly in light of Crown Farms' recent organic fertilizer launch?

What is the recent major investment announced for Dubai's data center sector and how does it fit into the Emirate’s wider strategy?

What are the elements of Saudi Arabia's newly announced nuclear energy program and how does it plan to utilize its uranium reserves?

Sustainably yours,

The SOMA team

Growing Green: Crown Farms Sprouts a Chemical-Free Novelty

#FoodandWaterSecurity

Crown Farms, a Fujairah-based organic farm management company established in 2022, has recently unveiled a new line of organic fertilizers aimed at advancing UAE's sustainable agriculture sector. These fertilizers, which are free from harmful industrial chemicals and comply with UAE Ministry of Climate Change and Environment's organic standards, are designed for vegetables, fruits, and herbs cultivation.

The announcement comes at a significant time in the global fertilizer market, as the World Bank's fertilizer price index showed relative stability in Q4 2024, with just a 1% increase from the previous quarter. The market has been characterized by ample supplies and stable energy prices, despite some trade restrictions, with prices expected to continue declining before stabilizing in 2026. However, the sector faces potential challenges from higher input costs, particularly natural gas.

Recent global trade dynamics have seen significant shifts, with China's phosphate and urea exports dropping by 60% and 90% respectively in H1 2024. Meanwhile, Europe has diversified its import sources, turning to countries like Egypt for ammonia, Morocco for phosphate, and Saudi Arabia and the United States for other fertilizer products. Of particular relevance to the region, fertilizer producers in the Middle East, Black Sea region, and North Africa heavily depend on the Suez Canal for exports, with potential Red Sea shipping disruptions posing risks to transportation costs.

SOMA’s Perspective:

With global fertilizer markets experiencing shifts in trade dynamics and supply chains, local production initiatives become increasingly strategic. Reports show Saudi farmers are having profit margins diminished due to rising production costs, including fertilizers. Building local fertilizer production facilities would serve as a hedge against future global market volatility and supply chain disruptions.

Sources:

Silicon Sands: Dubai's Digital Dreams Get a Boost

#NetZeroTransition #FoodandWaterSecurity

Dubai's data center landscape is set for an expansion as Gulf Data Hub partners with global investment giant KKR & Co. The collaboration will see a historic $5 billion (Dh18.365 billion) investment aimed at enhancing data centre capacity across the UAE and Middle East region.

Gulf Data Hub, which has been at the forefront of data centre solutions since 2012, will first undergo a strategic transformation with KKR & Co. acquiring a stake in the Dubai-founded company. This transaction represents one of the biggest international investments ever made in a UAE-founded and managed business. The partnership brings together Gulf Data Hub's regional expertise with KKR & Co.'s substantial investment experience. KKR & Co., an American global private-equity powerhouse, brings impressive credentials to the table, having completed private-equity investments in portfolio companies with a total enterprise value of approximately $710 billion as of 2023.

In April 2024, Dubai launched the Dubai Universal Blueprint for Artificial Intelligence. The initiative aims to accelerate the adoption of artificial intelligence (AI) applications. Its first phase encompasses appointing an AI chief executive officer for each government entity, establishing AI and Web3 incubators, launching AI week across educational institutions, introducing Dubai's AI commercial license, and designating land for data centers.

SOMA’s Perspective:

This aligns with our analysis of the growing importance of data centers in the MENA region, driven by the adoption of AI technologies. As the region positions itself as a global AI hub, the demand for data center capacity will continue to surge. The development of data center infrastructure must be balanced with sustainable resource management strategies, particularly in a region where water scarcity is a concern. Future investments in this sector should prioritize water-efficient cooling technologies and renewable energy solutions to ensure sustainable growth.

Sources:

Uranium U-Turn: Kingdom Powers Up Its Energy Portfolio

#NetZeroTransition

In a significant development for the Kingdom's energy sector, Saudi Arabia has announced its commitment to developing a nuclear program specifically aimed at energy generation. This initiative is designed to leverage the country's substantial uranium reserves, which are estimated to comprise between 1% and 4% of global reserves.

The Kingdom's ambitious plans include the conversion of uranium into fuel, with the intention of selling it at premium prices in the market. This demonstrates Saudi Arabia's commitment to diversifying its energy portfolio and maximizing the economic potential of its natural resources. The Kingdom aims to incorporate nuclear power as part of its broader energy mix.

In January 2025, Saudi Arabia revealed plans to begin enriching and selling uranium. It aims to export a diverse range of energy products, including oil, gas, electricity, solar power, hydropower, and nuclear energy. Other countries in the region like the UAE have demonstrated successful implementation of nuclear power in the region. The Barakah Nuclear Energy Plant located in Abu Dhabi is the first nuclear energy plant in the Arab World, leading the biggest decarbonization efforts in the region.

SOMA’s Perspective:

Following the example of the UAE's Barakah Nuclear Energy Plant, Saudi Arabia's commitment to nuclear power development points to a growing regional recognition of nuclear energy's role in achieving energy diversification and decarbonization goals. We anticipate this trend to continue as other countries in the region seek to balance their energy portfolios while meeting increasing power demands and sustainability targets.

Sources:

SOMA MATER is writing Intelligence Reports on the topics of Food and Water Security and Net Zero Transition. If you’d like to know more, contact us through the link below:

https://wkf.ms/3BmPiPo