Saudi Arabia sees soaring demand for halal products in a sign of wider global market growth for the sector

Saudi Arabia plays a big role in the growth of the halal industry because it wants to redefine the definition of halal products and create a global reference point for halal certification, halal inspection and halal qualification. (Shutterstock)
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Updated 16 July 2023
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Saudi Arabia sees soaring demand for halal products in a sign of wider global market growth for the sector

  • Kingdom witnessing a boom as an increasingly number of Muslims across the world buy halal products
  • Global halal economy could grow to $4.96 trillion by 2030

RIYADH: The growth of halal medicines, cosmetics and even sportswear is fueling an economic boom that is reaching far beyond  Saudi Arabia, and the wider Middle East.

Global product launches with halal claims jumped by 19 percent from 2018 to 2020, from over 16,000 products to more than 20,000. 

Some 63 percent of these products have been reported to be coming from Asia, followed by Africa and the Middle East.

FASTFACT

$4.96 trillion According to American marketing research company Frost and Sullivan, the global halal economy is one of the fastest-growing in the world and has the potential to reach $4.96 trillion by 2030.

All this shows that those who still think of “halal” as just a set of Islamic rules regarding meat are missing out on a sector that still has a huge growth potential.

What constitutes halal?

Halal is an Arabic word that means “permissible” or “lawful.” 

According to Islamic law and stated in the Holy Quran, the term refers to both goods and services that are acceptable to Muslims. 

Halal products are typically known as being pork free, for their specific method of slaughter — whereby an animal must be killed by a cut to its throat and the procedure must be performed by a Muslim, and alcohol free. 

The opposite of halal is haram, which means “forbidden.” There are now governing bodies that issue certificates to businesses certifying that their goods are indeed made according to halal procedures.

The halal industry was “valued at $1.27 trillion in 2021 and is projected to reach $1.67 trillion in 2025,” , the acting chief product and partnership officer of the Islamic Development Bank told Arab News, adding that the food sector is largest part of that.

According to American marketing research company Frost and Sullivan, the global halal economy is one of the fastest-growing in the world and has the potential to reach $4.96 trillion by 2030. 

This would represent a sizeable increase from 2020, when the value of the global halal economy  reached $2.30 trillion.

 With a worldwide presence of 2.2 billion people or approximately 26 percent of the world’s population, Muslim consumers are a fast-growing segment.

Saudi Arabia, the birthplace of Islam, is currently undergoing rapid social and economic transformation and witnessing a boom in the halal economy.

“Halal economy is expanding,” Hussein Shobokshi, Saudi businessman and columnist told Arab News. “It used to be only for poultry and beef and for general food items and now involves cosmetics, cleaning, and household items.”

He added: “There is now also an argument to be made for products that are sustainable, made responsibly and green that should also fall under halal.

“Saudi Arabia is now championing the halal industry because it is the largest consumer of halal products in the Middle East.”

There is a huge market potential for the halal economy stresses Shobokshi, however, he emphasizes that with the increase in potential and desire by companies to take advantage of the growing scope of the industry, “the challenge now is to clarify and define what constitutes halal.”

The businessman added: “We are talking about relatively a very juicy, attractive, and serious market potential. 

“That's why a lot of the major players such as Procter and Gamble, Unilever and the Nestle and all the major food, cosmetics and clothing producers are targeting this market to be qualified as halal producers as well.”

Saudi Arabia, continues Shobokshi, plays a big role in the growth of the halal industry “because it wants to redefine the definition of halal products and create a global reference point for halal certification, halal inspection, halal qualification to become more global in its standards and remove any gray areas that would leave the consumers in a confusing area.”




Hussein Shobokshi

To be at the forefront of the halal economy is a natural step for the Kingdom given its recent transformation and the fact that it is the center of the Islamic world.

“It is a natural extension of its position to strive to lead the growing halal economy,” he added.

In October 2022, Saudi Arabia’s Public Investment Fund announced the launch of the Halal Products Development Co. 

The new company will invest in localizing the production of the halal industry in Saudi Arabia and increase the efficiency of the ecosystem locally, including plans to export to global markets. 

HPDC aims to enable small and medium-sized enterprises to grow and expand across global halal markets in partnership with key local and international players.

“Saudi Arabia has a unique and important role to play, not only among Muslim countries but all the over the world when it comes to both Fiqh Al-Muamalat (civic matters) as well as Fiqh Al-Ibaadaat (religious matters),” Waheed Qaiser, a British-Pakistani Islamic banker and entrepreneur told Arab News.  

Qaiser states that since the set-up of the first Islamic bank in 1975 in Dubai, “the focus on thalal economy and its products has brought a wake-up call among Muslims and the demand has intensified.”

He further notes how due to an increase in the health-conscious consumer, which includes Muslims, the market for natural and organic food items has grown.

“This trend has led to increased utilization of halal food products as overall they offer better hygiene and sanitation which is good for the human body and prevents various diseases,” he claimed, adding: “This is why today you see halal concessions/dedicated areas for halal products in all western-style supermarkets all over the western world.” 




Waheed Qaiser

Qaiser recalled how he was once told by a major supermarket that by introducing a halal counter their overall sales had gone up significantly.  

Buying halal products is also seen to reinforce a sense of Muslim pride and identity and this extends from Saudi Arabia to the greater Gulf, Asia, Africa and beyond. 

Many Islamic Development Bank member countries are making conscious efforts to develop their halal economies and capture the potential of the market. 

Additionally, between 2020 and 2026, economies of the Organization for Islamic Cooperation are forecasted to experience a growth rate of over 7 percent, with Malaysia, the UAE, Saudi Arabia, Qatar, and Turkey having clear visions of becoming hubs for the global halal trade. 

Even non-majority Muslim countries like Thailand, Japan, and South Korea aim to position themselves as key players in the halal market. Australia and Brazil, meanwhile, are among the top halal meat and poultry suppliers to countries in the Middle East.

One Gulf Cooperation Council country that is perceived as a major player and has been witnessing massive growth when it comes to the halal economy is Qatar.

The nation has been encouraging core sectors with high growth potential to develop products and services prescribed by Islamic law, according to resereach by the Investment Promotion Agency of Qatar.  

The study shows the country recorded market assets worth $156.4 billion in financial markets in 2021, followed by $1 billion in Islamic insurance, also known as takaful, $14.2 billion in Islamic tourism, $5.1 billion in healthcare and $849 million in Islamic fintech.  

The research also highlighted Qatar’s role in developing the global and national halal accreditation ecosystem by establishing the Organization of Islamic Cooperation Halal Accreditation Center and the evolution of the Ministry of Public Health’s guidance on importing halal food products.  

There is no doubt about the boom of the halal market both within in the GCC, wider Middle East and globally. There seems to be no limit to the quantity and variety of halal products now being produced.

However, the challenge that remains is clarifying the definition of halal.

Bukvic agrees: “There is a need to address two important challenges facing the halal economy, namely financing the halal industry and effective management of the halal supply chain.”


Pakistani investment firm, real estate developer launch country’s first Shariah-compliant hotel REIT

Updated 17 sec ago
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Pakistani investment firm, real estate developer launch country’s first Shariah-compliant hotel REIT

  • Real estate investment trusts allow investors exposure to property markets without directly owning assets
  • The REIT will finance a 139-room hotel in Hyderabad under a franchise deal with a global hospitality brand

KARACHI: A Pakistani investment firm on Wednesday announced the launch of what it described as the country’s first Shariah-compliant real estate investment trust (REIT) focused on the hospitality sector.

A REIT is a regulated investment vehicle that pools capital from investors to finance income-generating real estate, offering returns through rent or capital gains. It provides exposure to the property market without direct ownership of assets.

JS Investments Limited, one of Pakistan’s oldest private-sector asset and REIT managers, has partnered with real estate developer Gohar Group of Companies to establish the JS Hotel REIT in Hyderabad district, located in the southeastern Sindh province.

“As the manager of Pakistan’s first hotel REIT, we are pleased to offer investors a professionally managed and regulated investment vehicle backed by international hospitality standards,” the statement quoted Iffat Zehra Mankani, CEO of JS Investments Limited, as saying.

The REIT will finance the development of a 139-room hotel in Hyderabad under a franchise agreement with an international hospitality brand. The fund is currently open to accredited local and foreign investors through private placement.

The statement added the Securities and Exchange Commission of Pakistan (SECP) had granted regulatory approval for the fund, which is not being offered to the general public at this stage.

Pakistan’s REIT market remains small, though regulatory reforms in recent years have aimed to draw institutional investment into real estate through both conventional and Islamic finance structures.

The project will also feature environmentally responsible construction, according to the statement.


Closing Bell: Saudi main index ends lower at 11,303 

Updated 21 May 2025
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Closing Bell: Saudi main index ends lower at 11,303 

  • MSCI Tadawul 30 Index lost 19.78 points to close at 1,441.01
  • Parallel market Nomu declined 110.94 points to end at 27,417.62

RIYADH: Saudi Arabia’s Tadawul All Share Index closed in the red on Wednesday, falling 134.5 points, or 1.18 percent, to settle at 11,303.68. 

The total trading turnover reached SR4.37 billion ($1.16 billion), with 37 stocks advancing and 206 declining. 

The MSCI Tadawul 30 Index also dropped, losing 19.78 points, or 1.35 percent, to close at 1,441.01. 

The Kingdom’s parallel market Nomu declined by 110.94 points, or 0.40 percent, to close at 27,417.62, with 26 stocks gaining and 49 retreating. 

The best-performing stock of the day was Saudi Arabia Refineries Co., rising 4.38 percent to SR69.10. 

Other top gainers included Perfect Presentation for Commercial Services Co., whose share price rose 3.37 percent to SR11.66, and SHL Finance Co., which gained 2.22 percent to SR20.30. 

The day’s largest decline was seen in National Gypsum Co., with its share price dipping 4.76 percent to SR20.4. 

ACWA Power Co. saw its shares drop 4.40 percent to SR274, while Al-Rajhi Co. for Cooperative Insurance declined 4.17 percent to SR115. 

On the announcements front, ACWA Power said it has received approval from the Capital Market Authority to proceed with a SR7.12 billion capital increase through a rights issue. 

The CMA’s decision, issued on May 20, allows the company to offer, register, and list rights issue shares — pending shareholder approval at an upcoming extraordinary general assembly. 

The rights issue was first disclosed on Dec. 19, when ACWA Power submitted its application to the CMA. 

Alinma Bank has successfully completed a $500 million issuance of dollar-denominated sustainable Additional Tier 1 capital certificates under its Tier 1 Capital Certificate Issuance Programme. 

The offering targets eligible investors in Saudi Arabia and internationally, with settlement expected on May 28. 

The issuance comprises 2,500 certificates, each with a par value of $200,000, offering an annual return of 6.5 percent. These perpetual instruments are callable after 5.5 years. 

The certificates will be listed on the International Securities Market of the London Stock Exchange and were offered exclusively under Regulation S of the US Securities Act of 1933. 

During Wednesday’s session, Alinma Bank shares rose 0.18 percent to close at SR27.50 on the main market. 

Flynas has set the final offer price for its initial public offering at SR80 per share following the successful completion of the institutional book-building process, which was oversubscribed by 99.8 times, according to a statement.

BSF Capital, Morgan Stanley Saudi Arabia, and Goldman Sachs Saudi Arabia, acting as joint financial advisors, co-underwriters, and joint bookrunners for the IPO, confirmed that institutional investors subscribed in full to the 51,255,568 ordinary shares allocated in the first phase, representing 100 percent of the total offered.

Following this, up to 20 percent of the total offering will be allocated to retail investors in the second phase of the IPO.

Saudi Fransi Capital, serving as lead manager, announced that all necessary arrangements have been completed with receiving agents to facilitate the individual subscription process, which will run for three days from May 28 until June 1 at 12:00 p.m.


Saudi Arabia’s PIF halts Swiss financial market investments over Credit Suisse fallout

Updated 21 May 2025
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Saudi Arabia’s PIF halts Swiss financial market investments over Credit Suisse fallout

  • Decision driven by how Swiss regulators handled 2023 government-backed rescue of Credit Suisse by UBS Group
  • PIF continues to expand footprint across Europe, signaling redirection of capital

RIYADH: Saudi Arabia’s Public Investment Fund will no longer allocate capital to Switzerland’s financial markets, two years after suffering losses from the collapse of Credit Suisse.

During the FII PRIORITY Europe Summit in Albania, PIF Gov. Yasir Al-Rumayyan said that the decision was driven by the manner in which Swiss regulators handled the 2023 government-backed rescue of Credit Suisse by UBS Group, reported Bloomberg.

The abrupt deal was executed without shareholders’ approval, impacting investors across the Middle East.

PIF, one of the world’s largest sovereign wealth funds, is reassessing its investment strategy amid growing concerns over regulatory stability and investor protection.

The fund’s decision to halt investments in Switzerland’s financial markets marks a significant shift in its approach, underscoring the long-term impact of the 2023 Credit Suisse collapse on regional and institutional investor confidence.

PIF also continues to expand its footprint across Europe, signaling a redirection of capital.

“We’re not going to invest in the financial markets in Switzerland. If you change something overnight and wipe out all of your investors, this is a big red flag,” Al-Rumayyan said, as reported by Bloomberg.

The remarks were made during an on-stage discussion with Noel Quinn, newly appointed chairman of Zurich-based Julius Baer Group Ltd.

Quinn responded: “As the chairman of a Swiss bank as of 10 days ago, that concerns me.”

The 2023 acquisition of Credit Suisse was finalized rapidly following a sharp decline in its stock price.

The plunge became worse after the former chairman of the Saudi National Bank, Ammar Al-Khudairy, said the bank would “absolutely not” be open to further investments in Credit Suisse.

“The deal didn’t receive approval from either Credit Suisse or UBS shareholders as regulators and lawmakers rushed to contain a crisis of confidence that was spreading across global markets,” according to Bloomberg.

The 2023 acquisition of Credit Suisse was finalized rapidly following a sharp decline in its stock price. Shutterstock

At the time, shareholders from the Middle East, including SNB and the Qatar Investment Authority, collectively held around 20 percent of Credit Suisse.

SNB, which was the largest shareholder in the Swiss lender, had called on Credit Suisse to reject the offer from UBS, Bloomberg reported.

Other investors had cautioned that the Swiss government’s decision to override standard merger procedures and sideline shareholder votes could deter institutional investors.

Legal analysts also warned that the rushed nature of the transaction had undermined Switzerland’s standing as a reliable investment destination where the rule of law is safeguarded.

Al-Rumayyan’s remarks came as PIF announced plans to open a subsidiary office in Paris and committed to doubling its investments in Europe to $170 billion by the beginning of the next decade.

The fund has already deployed approximately $85 billion across the region between 2017 and 2024, making strategic investments in key European economies, including the UK, France, and Italy.


Saudi Arabia and Kyrgyzstan announce establishment of a joint business council 

Updated 21 May 2025
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Saudi Arabia and Kyrgyzstan announce establishment of a joint business council 

  • Forum reviewed investment opportunities, advantages, and incentives in Saudi Arabia and Kyrgyzstan
  • Bilateral meetings were held between company representatives from both countries

BISHKEK: Saudi Arabia and Kyrgyzstan, represented by the Saudi Chambers Federation and the Kyrgyz Chamber of Commerce and Industry, announced the signing of an agreement to establish a Saudi-Kyrgyz Joint Business Council — a significant step to advance economic cooperation between the two countries. 

The signing ceremony took place on the sidelines of the Saudi-Kyrgyz Business Forum held on May 21 in Bishkek, the Kyrgyz capital, in the presence of Kyrgyz Minister of Economy and Commerce Bakyt Sydykov, Saudi Chambers Federation Chairman Hassan bin Muajab Al-Huwaizi, and several ministers and officials from both nations, the Saudi Press Agency reported. 

The forum was also attended by Saudi-Kyrgyz Business Council Chairman Ahmed Al-Dakhil, Saudi Arabia’s Ambassador to Kyrgyzstan Ibrahim bin Radi Al-Radi, Kyrgyzstan’s Ambassador to Saudi Arabia Ulukbek Maripov, along with more than 100 investors. 

The chairman of the Saudi Chambers Federation emphasized that the establishment of the joint business council is the result of sustained efforts and mutual desire, providing an effective platform for Saudi and Kyrgyz businessmen to showcase and promote their activities and build commercial partnerships, amid vast opportunities for cooperation between the two countries. 

The joint business forum reviewed investment opportunities, advantages, and incentives in Saudi Arabia and Kyrgyzstan across sectors including exports, healthcare, pharmaceuticals, banking, hydropower, agriculture, and technology. 

Bilateral meetings were also held between company representatives from both countries. 

Notably, the federation’s delegation visits to Kyrgyzstan included a series of meetings with government and private sector officials to discuss prospects for economic cooperation and explore investment opportunities. 


Saudi crude output hits 8.96m bpd in March: JODI data

Updated 21 May 2025
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Saudi crude output hits 8.96m bpd in March: JODI data

  • Crude exports fell by 12.11% month on month to 5.75 million bpd
  • Kingdom’s slight increase in crude production came amid a broader strategic pivot within OPEC+

RIYADH: Saudi Arabia’s crude oil production rose to 8.96 million barrels per day in March, reflecting a 0.11 percent monthly increase, according to the latest Joint Organizations Data Initiative data.

According to the database, crude exports fell by 12.11 percent month on month to 5.75 million bpd.

Refinery crude exports rose 10.3 percent during this period to 1.55 million bpd. The uptick was driven primarily by diesel shipments, which jumped 20.66 percent from the previous month to 806,000 bpd.

It also accounted for the largest share of refined product exports in March at 52 percent, followed by motor and aviation gasoline at 17 percent, and fuel oil at 12 percent.

Total refinery output reached 2.94 million bpd in March, a 12.32 percent monthly increase, with diesel comprising 42 percent of refined products, motor and aviation gasoline 24 percent, and fuel oil 15 percent.

Domestic demand for refined petroleum products increased by 223,000 bpd in March compared to the previous month, reaching 2.22 million bpd.

On an annual basis, demand rose by 5.07 percent, equivalent to 107,000 bpd.

The Kingdom’s slight increase in crude production across the month came amid a broader strategic pivot within OPEC+, which has agreed to significantly boost oil output starting in June. The alliance announced an additional 411,000 bpd increase for June, following a similar adjustment made for May.

This marks a continuation of the group’s recent efforts to accelerate the return of previously curtailed supply to the global market. The upcoming increase is expected to add further downward pressure on prices, which have already been trending lower due to ample inventories, modest international demand growth, and increasing non-OPEC output.

Total refinery output reached 2.94 million bpd in March, a 12.32 percent monthly increase. Shutterstock

Direct crude usage

Saudi Arabia’s direct crude oil burn rose to 383,000 bpd in March, reflecting a 35.3 percent increase from the previous month.

Direct crude burn refers to the use of unrefined crude oil for electricity generation, rather than for export or refining.

The increase came amid the seasonal ramp-up in cooling needs as temperatures begin to rise heading into the warmer months.

Although the Kingdom has made substantial progress in expanding its natural gas infrastructure to reduce reliance on direct crude burn, fluctuations still occur, particularly in transitional months like March, when energy demand begins to shift but supply systems have not fully ramped up.