UAE Hydroponics

UAE Hydroponics Market Research Report: Forecast (2023-2028)

By Type (Nutrient Film Technology [NFT], Deep-Water Culture Systems, EBB and Flow Systems, Dutch bucket Systems), By Equipment (HVAC, LED Grow Light, Control Systems, Irrigation Systems, Others [Air p Read more

  • Environment
  • Mar 2023
  • 98
  • ET55030

Market Definition

Hydroponics is a type of horticulture & a subset of hydroculture, which involves growing plants, usually crops or medicinal plants, without soil, using water-based mineral nutrient solutions in aqueous solvents.

Market Insights

The UAE Hydroponics Market is projected to grow at a CAGR of around 15.2% during the forecast period, i.e., 2023-28. Most of the market growth would be propelled by the ever-rising water challenges, food security issues, and increasing government focus on promoting sustainable agricultural techniques. The UAE receives a low annual rainfall & has limited water resources, owing to which, several water challenges are emerging. Since more than 90% of the country's groundwater is saline, it cannot be used directly for agricultural purposes. As a result, farmers are adopting a sustainable agriculture solution, hydroponics, thereby fueling market expansion.

Further, the UAE has been dependent majorly on other countries like India for crops & vegetables. Hence, even the slightest change in international prices causes fluctuation in the domestic prices of crops & vegetables. According to the Foreign Agriculture Service, the UAE imported over 90% of its food products, such as wheat, rice, etc., from other countries & spent around USD14 billion to import food in 2020. Therefore, the government is encouraging farmers to opt for these systems to mitigate this dependence, i.e., stimulating market growth.

Report Coverage Details
Study Period Historical Data: 2018-21
Base Year: 2022
Forecast Period: 2023-28
CAGR (2023-2028) 15.2%
Region Covered Dubai, Abu Dhabi & Al Ain, Sharjah & Northern Emirates
Key Companies Profiled H2O Hydroponics, Artechno Growsystems, Gulf Hydroponic Agriculture Services LLC, Argus Control Systems Ltd, VeggieTech, Beyond Hydroponics, GreenOponics Agricultural Services LLC, Beyond Hydroponics Green Houses Trading LLC, The Growin, Others
Unit Denominations USD Million/Billion

 

Moreover, the UAE Government has also taken initiatives such as National Food Security Strategy 2051, the Ziraai program, etc., to promote sustainable agriculture & is massively investing in the expansion of the agricultural sector. For instance, in 2020, the Abu Dhabi Agriculture and Food Safety Authority (Adafsa) funded over USD173 million to upscale the local production of crops in the region & enhance the farming and livestock sector. Similarly, in 2019, the government of the UAE invested around USD272 million to boost agricultural technology startups by providing them with tax incentives. Hence, these government-led programs and investments to improve domestic production in the UAE are expected to have a positive effect on the market in the years to come.

Market Dynamics:

Key Driver: Increasing Agricultural Smart Farms in the UAE

Since the UAE does not have arable land & faces water scarcity challenges, conventional farming is not possible in the country. The government exports over 90% of its food products annually from countries like India, Australia, etc. With this reliance of the UAE on the neighboring countries, even the slightest fluctuation or disruption in logistics affects the prices of food products in the country. Hence, to minimize vulnerabilities like price hikes & market supply stocks, the government of the UAE is actively promoting the use of sustainable farming methods, i.e., resulting in the increasing number of large commercial farms, consequently augmenting the sales of hydroponic systems in the UAE.

Further, the government of the country is continuously seeking to integrate the most recent technology into the contemporary agricultural approach due to poor soil quality. Thus, there has been an incorporation of these systems in the farms located in the UAE to grow crops without the soil & large quantity of water. As a result, there has been an upsurge in sales during the historical period.

Moreover, according to the Head of UAE's Food and Water Security Office in 2022, the number of farms in the UAE has marginally expanded, with more than 35,000 farms in the country, out of which the majority of these farms use modern technologies like hydroponic farming & vertical farming. Further, growing investments by private entities like Zones Corp., Khalifa Fund for Enterprise Development, etc., in sustainable farming techniques also indicate a notable market growth in the UAE in the coming years.

Possible Restraint: Unavailability of the Raw Materials to Restrain the Manufacturing of Hydroponic System

Raw materials required for manufacturing hydroponic systems, such as sensors, control systems, etc., are unavailable in the UAE as these are significantly small electrical industries. Hence, manufacturers solely depend on other countries like China, India, etc., for these components, which inflates the overall cost of hydroponic systems. In addition to this, these systems generally comprise components like HVAC, irrigation, control systems, etc., which is why the overall operational costs are also significantly higher than conventional approaches.

Further, massive investments are required for the construction of green buildings or farms equipped with these systems, with which comes bigger risks that farmers avoid taking. Hence, these aspects are likely to hamper the expansion of the market through 2028.

Growth Opportunity: Growing Government Investments in Sustainable Farming Methods

The UAE government is primarily focused on promoting sustainable agriculture by minimizing taxes and facilitating public-private partnerships. It has relaxed stringent regulations and is now allowing private entities to invest in the country's agricultural sector. As a result of these factors, the development of smart farms in the UAE has accelerated, thereby expanding the need for hydroponic systems. In addition, the UAE government has launched Abu Dhabi Vision 2030, which promotes sustainable agriculture through a series of funding and investment initiatives.

Consequently, the number of indoor vertical farms in the UAE is expected to rise, thus these government investments & government-led initiatives are acting as an opportunity for hydroponics system manufacturing companies in the future.

Key Trend: Smart Monitoring Systems to Measure CO2 Levels Are Gaining Traction

Hydroponic systems traditionally use equipment such as LED Lights, HVAC systems, etc., to provide a suitable environment for the growth of crops. However, large-scale growing facilities such as commercial farms, etc., primitively rely on advancements in automation technology to increase operational efficiencies & maximize output. Furthermore, the farmers are switching towards automated greenhouse buildings, which are completely managed by machines such as conveyor belts, sensors, and control systems owing to the smart features it provides. Also, smart greenhouses automatically adjust indoor environmental factors, such as adapting lighting & ventilation and detecting CO2 levels, humidity, and nutrient levels.

Therefore, large commercial farms in the UAE, including Badia Farms, Wafra Farms, etc., are adopting smart monitoring systems & are relying on the automated greenhouse fully equipped with these systems. Thus, the incorporation of smart monitoring systems would further accelerate the demand for hydroponic systems in the forecast years.

Market Segmentation

By Equipment Type:

  • HVAC
  • LED Grow Light
  • Control Systems
  • Irrigation Systems
  • Others (Air pimps, Hydroponic tubing, etc.)

Of them all, HVAC is expected to acquire a significant share of the UAE Hydroponics Market during 2023-28, owing to the increasing demand for a controlled environment for farming. HVAC systems provide proper ventilation, therefore, they are adopted extensively for indoor farming practices. Moreover, unique cannabis hydroponic HVAC systems are needed so that farmers have better control of the environment in every grow room. Hence, to maintain adequate airflow, temperature, humidity, & lighting, for optimal crop growth, HVAC equipment is witnessing high demand to address the rising number of indoor farms in the UAE like Badia farms, etc.

Based on Type:

  • Nutrient Film Technology (NFT)
  • Deep-Water Culture Systems
  • EBB and Flow Systems
  • Dutch bucket Systems

Among them, Nutrient Film Technology (NFT) is more widely adopted as plants grown through this technique can be harvested quickly. In these systems, a thin stream of water flows through a rectangular channel, thus crops get the right amount of water at regular intervals of time, facilitating the growth of the crops and plants. As a result, most farmers opt for NFT to produce crops & plants at a swift pace. Moreover, the NFT Systems are easier to maintain & require fewer investments, as a result, it is the more ideal choice for farmers to grow these crops via NFT systems. Hence, these systems acquired a significant share in the historical years.

Additionally, the soil in the UAE is not arable, making it impossible to grow crops there. Subsequently, farmers are gradually switching to Deep-water Culture systems because they don't need soil to grow crops. The risk of pest growth is also reduced by these systems, so farmers are gradually moving toward technology to make crop cultivation easier. Consequently, it is expected that in the years to come, demand for hydroponics systems with Deep-Water Culture Systems will soar.

Regional Landscape               

Geographically, the market expands across:

  • Dubai
  • Abu Dhabi & Al Ain
  • Sharjah & Northern Emirates

The demand for hydroponic systems arises majorly from Abu Dhabi & Al Ain, owing to the presence of large commercial farms in the region due to the availability of wide cultivation areas. The municipal corporation of Abu Dhabi & Al Ain is also offering better opportunities for investments in the agricultural sector. Therefore, several private entities such as AeroFarms AgX, and others are setting up their commercial farms in the Abu Dhabi & Al Ain regions, hence the demand for hydroponics systems is primitively arising from the Abu Dhabi & Al Ain regions. Indoor farms such as the GreenFactory Emirates & others are being set up in Abu Dhabi & Al Ain to promote sustainable farming, which would eventually generate the demand for hydroponic systems in the coming years.

  • In 2022, Abu Dhabi Agriculture and Food Safety Authority (ADAFSA) signed Two Musataha agreements with two local private sector companies to build & operate two farms in Abu Dhabi with a total value of USD84.3 million.

Therefore, the demand for these systems is expected to arise from these commercial farms, located in Abu Dhabi & Al Ain during the forecast period. Besides, to reduce costly imports of high-value fresh produce & to supply leafy greens for in-flight meals, Dubai-based airline Emirates opened the world's largest hydroponics farm in July 2022. As a result, the demand for these systems is anticipated to arise from Dubai in the forthcoming years.

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Frequently Asked Questions

A. The UAE Hydroponics Market is set to record around 15.2% CAGR during 2023-28.

A. The HVAC is the leading equipment type in the UAE Hydroponics Market.

A. The ever-increasing number of smart farms in the UAE is expected to drive the UAE Hydroponics Market during 2023-28.

A. The key companies operating in the UAE Hydroponics Market include H2O Hydroponics, Artechno Growsystems, Gulf Hydroponic Agriculture Services LLC., Argus Control Systems Ltd, VeggieTech, Beyond Hydroponics, GreenOponics Agricultural Services LLC, Beyond Hydroponics Green Houses Trading LLC, and The Growin.

A. The introduction of smart monitoring systems to measure CO2 levels is the key trend in the UAE Hydroponics Market.

A. The growing government investments in sustainable farming would drive the market through 2028.

  1. Market Segmentation
  2. Introduction
    1. Product Definition
    2. Research Process
    3. Assumptions
  3. Executive Summary
  4. The UAE Agriculture Industry Scenario, 2023
    1. Existing Outlook (Total Cultivated Area, Total Crop Production, Existing Technologies, etc.)
    2. Government Initiatives
    3. Others
  5. The UAE Hydroponics Market Trends & Developments
  6. The UAE Hydroponics Market Dynamics
    1. Growth Drivers
    2. Challenges
  7. The UAE Hydroponics Market Regulations & Policy
  8. The UAE Hydroponics Market Supply Chain Analysis
  9. The UAE Hydroponics Market Hotspots & Opportunities
  10. The UAE Hydroponics Market Outlook, 2018-2028F
    1. Market Size & Analysis
      1. By Revenues (USD Million)
    2. Market Share & Analysis
      1. By Type
        1. Nutrient Film Technology (NFT)
        2. Deep-Water Culture Systems
        3. EBB and Flow Systems
        4. Dutch bucket Systems
      2. By Equipment 
        1. HVAC
        2. LED Grow Light
        3. Control Systems
        4. Irrigation Systems
        5. Others (Air pimps, Hydroponic tubing, etc.)
      3. By Farm Type
        1. Indoor
        2. Outdoor
      4. By End Users
        1. Restaurants
        2. Commercial Farms
      5. By Crop Type
        1. Fruits & Vegetable
        2. Flowers & Turfs
      6. By Region
        1. Dubai
        2. Abu Dhabi & Al Ain
        3. Sharjah & Northern Emirates
      7. By Company
        1. Competition Characteristics
        2. Revenue Shares & Analysis
  11. The UAE Hydroponics Market Key Strategic Imperatives for Success & Growth
  12. Competition Outlook
    1. Competition Matrix
      1. Product Portfolio
      2. Target Markets
      3. Research & Development
      4. Strategic Alliances
      5. Strategic Initiatives
    2. Company Profiles (Business Description, Product Segments, Business Segments, Financials, Strategic Alliances/ Partnerships, Future Plans)
      1. H2O Hydroponics
      2. Artechno Growsystems
      3. Gulf Hydroponic Agriculture Services LLC
      4. Argus Control Systems Ltd
      5. VeggieTech
      6. Beyond Hydroponics
      7. GreenOponics Agricultural Services LLC
      8. Beyond Hydroponics Green Houses Trading LLC
      9. The Growin
      10. Others
  13. Disclaimer
UAE Hydroponics Market - Segmentation Slide