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Wednesday, August 2, 2017

Qatar blockade ! 4000 cows by cattle class ! Insurance coverage !!

Qatar is a sovereign country located in Western Asia, occupying the small Qatar Peninsula on the northeastern coast of the Arabian Peninsula. Its sole land border is with Saudi Arabia to the south, with the rest of its territory surrounded by the Persian Gulf. Following Ottoman rule, Qatar became a British protectorate in the early 20th century until gaining independence in 1971.

It is in news ~  The State Department issued an unusual public warning to Saudi Arabia and the United Arab Emirates on Tuesday over a diplomatic rift with fellow U.S. ally Qatar, and suggested that the Saudis may have provoked a crisis and drawn in the United States on false pretenses. Department spokeswoman Heather Nauert said the administration was “mystified” that — two weeks after announcing a diplomatic and economic embargo against Qatar over alleged support for terrorism — Saudi Arabia and the UAE have not publicly detailed their complaints. Nauert queried :  “At this point, we are left with one simple question: Were the actions really about their concerns about Qatar’s alleged support for terrorism, or were they about the long-simmering grievances between and among the GCC countries?”

All three nations are part of the six-member Gulf Cooperation Council, a loose diplomatic confederation of mostly wealthy Persian Gulf states. Of them, Saudi Arabia is the most powerful. Saudi Arabia, the UAE and Bahrain, along with Egypt, severed diplomatic ties with Qatar this month and blocked trade and passenger traffic through their territory and airspace in protest of what the three said was Qatar’s backing of extremist Islamist organizations, as well as its ties to Iran.

The blockade is cause of for some Indians too - airlifting citizens in times of emergency is not something new to India and it is planning yet another “airlift” for its people stuck in blockade-hit Qatar, reports The Times of India. A source from the Aviation Ministry told TOI that Air India Express has been tasked with the mission; it will operate special flights between Kerala and Doha from June 25 to July 8. Air India Express is slated to use Boeing 737, with sitting capacity of Boeing 737. Jet Airways will operate extra flights between Mumbai and Doha on Thursday and Friday, added the report.   External Affairs Minister SushmaSwaraj earlier spoke to the Aviation Minister A Gajapathy Raju at the beginning of this week, requesting additional flights “to Doha for Indian nationals who were not able to get bookings but needed to reach the country back from Doha.”

On a different plane, more than a 1,000 camels have been caught up in the dispute between Qatar and neighbouring Gulf countries. Saudi Arabia shut its border with Qatar on June 5 and travellers between the two countries, including camels, found themselves stranded. Saudi authorities expelled more than 12,000 camels and 5,000 sheep and their Qatari herders from its territory.

                  The showdown between Qatar and its neighbours has disrupted trade, split families and threatened to alter long-standing geopolitical alliances.  Most of the fresh milk and dairy products for Doha’s more than 1 million population came from Saudi Arabia up until recently.  That milk is getting scarce after the kingdom, the United Arab Emirates and two allies cut transport links with a country that spends $500m a week to prepare stadiums and a metro before the soccer World Cup in 2022.

Al Khayyat, whose main business is a construction firm that built Qatar’s biggest mall,  has tried out an innovative answer.  Last fortnight, a ship from Australia carrying thousands of sheep arrived at Qatar's Hamad port. A prominent businessmen last week announced plans to airlift 4,000 cows into the desert country.  On a cattle farm in the desert outside Doha, hundreds of cows imported from the Netherlands are led into an air-conditioned hall to be milked by Asian workers in orange uniforms. Ghadeer farm, set among scrubland near a U.S. air base, is scrambling to meet a surge in demand for milk caused by a Saudi-led economic boycott of Qatar that has raised fears of food shortages in a country dependent on imports.

At the farm, black cows stood ankle-deep in mud under hangers as workers unloaded bags of grass from tractors. "It's been non-stop and we are exhausted. The cows are exhausted too," said  a worker from Nepal. "We are confident we can increase production but we need to ensure we have enough food for the cows and better facilities." The farm, set up in 1985, was the first attempt to rear cattle on an industrial scale in the Arabian Peninsula country where fierce temperatures and vast gas revenues mean food and fresh produce are typically flown or shipped in.

Food insecurity has long preoccupied Qatar which shares its only land border with Saudi Arabia and buys 80 percent of its food from the neighbours that have ostracised it. The government has acquired farmland in countries like Sudan and is growing crops on vast farms in the desert with water piped in from desalination plants. Qatari traders say they can avert shortages and survive the boycott by striking deals with new suppliers from places like India and China. But the sanctions have led to worry on the farm.  This  prompted one Qatari businessman to fly 4,000 cows to the Gulf desert in an act of resistance and opportunity to fill the void left by a collapse in the supply of fresh milk.  It will take as many as 60 flights for Qatar Airways to deliver the 590-kilogramme beasts that Moutaz Al Khayyat, chairman of Power International Holding, bought in Australia and the US “This is the time to work for Qatar,” he said.

Turkey has replaced products that disappeared from supermarket shelves, including yoghurt and laban, while Morocco and Iran have pledged to supply the emirate with foodstuffs.  Qatar has negotiated new cargo handling arrangements in the Omani ports of Sohar and Salalah, avoiding the need for goods to stop in the UAE. Shipments of containers through the UAE port of Jebel Ali were frozen last week. Qatar has also appealed to international aviation authorities to rule as illegal the overflight ban imposed on Qatar Airways by its neighbours, and has briefed lawyers to challenge the flight and other restrictions in the courts.

On Sunday Saudi Arabia’s arch-rival Iran announced it had sent five planes carrying produce to Qatar. Three ships carrying 350 tonnes of food were also set to leave Iran for the emirate.  Meantime, it is not all that honey and milk for the imported cows. With temperatures approaching 50 degrees, the cows are suffering heat stress and producing less milk, states one and there is also shortage of grain supplements to feed the cows and boost their milk volumes but the grain comes from the UAE !

The ostensible reason for the blockade – that the Qataris have funded terror – is as easily applicable to Saudi Arabia and other Gulf states. Instead, the real motivation appears to be punishment for Qatar’s independent foreign policy, which is underwritten by an expansive and canny global investment strategy from London to Tokyo. The county has hosted members of the Muslim Brotherhood and Hamas and pursued a conciliatory relationship with Iran, with which it shares a large gas field.

Whilst so much of demand – is good news for suppliers elsewhere, there is also a concern that Ship and cargo owners have been told they should check with their insurers if they are looking to trade with Qatar as diplomatic tensions in the region continue to escalate. Ports in Saudi Arabia, Bahrain, and the United Arab Emirates (UAE) are understood to be closed to ships flying the Qatari flag. Some ports may also be closed to ships, irrespective of their flag, that are destined for or arriving from Qatari ports.

The row has left marine insurers warning that clients will need to check their cover carefully if their routes involve Qatar, despite the fact that there are no official sanctions in place. Brokers in the London market have said underwriters remain wary of offering cover to Qatari or Qatar-bound risks at present. P&I clubs have been quick to offer guidance and warn owners they need to be aware of the exclusions and prohibitions in coverage.

There is no UN or other Official sanction – but a trade embargo. It means in practice that ships flying the Qatari flag will not be allowed to call at certain other ports in the region.  Thus, it is not in itself prohibited to insure a ship trading on Qatar.  Some overcautious Insurers may decline or may not be willing to cover shipments to Qatar, perceiving larger threat.  Moreover higher percentage of goods being shipped are in the nature of perishable goods.  Perhaps the snowballing issue could have a soft-death, before some Insurers decide their stand.

With regards – S. Sampathkumar

22nd June 2017

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