Vietnam, Saudi Arabia work to shrink trade imbalance

06:00 | 12/04/2020 Cooperation

(VEN) - While trade cooperation has flourished between Vietnam and Saudi Arabia, both sides are concerned about a trade imbalance. This year, the Vietnamese Trade Office in Saudi Arabia has launched a plan focusing on trade connectivity and introducing Vietnam’s products to the Saudi market.

vietnam saudi arabia work to shrink trade imbalance
Footwear is among Vietnamese products that are gradually gaining a foothold in the Saudi market

Saudi Arabia is Vietnam’s most important trade partner in the Middle East region. Two-way trade turnover has increased rapidly - from only US$36.3 million in 2001 to US$1.7 billion in 2019. Some Vietnamese products are gradually gaining a foothold in the Saudi market, including textiles, footwear, dragon fruit, dried lychee and longan, seedless lemon, passion fruit, cashew nut, rice, peppercorn, electronic components, machines and phones.

According to Tran Trong Kim, head of the Vietnamese Trade Office in Saudi Arabia, there is high demand for Vietnamese textiles, dragon fruit, lychee, longan, especially with the decline of fruit imports from China due to the Covid-19 pandemic.

Although trade cooperation has yielded positive results, a trade imbalance has developed between the two countries. In 2019, Vietnam’s imports reached US$1.35 billion while exports totaled a mere US$350 million. To rectify the deficit, the trade office has formulated a plan concentrating on boosting trade connections and introducing Vietnamese products to Saudi importers. The trade office has retrieved business information from the Chambers of Commerce and Industry in Riyadh and Jeddah and from large supermarket chains, such as Carrefour, Panda and Lulu. In addition, the trade office has taken part in conferences and trade promotion forums to obtain relevant information for Vietnam’s companies and also to forge contacts with importers of textiles, agricultural products and crafts for Vietnamese manufacturers and exporters.

The results have been encouraging. For example, Vietnam’s Navytext International Joint Stock Company has signed a contract for 10,000 products. In addition, a global network equipment company has signed a contract to import production materials worth US$312,000 and many companies are considering cooperation agreements.

In order to penetrate deeply into this market and increase Vietnam’s export value, according to Tran Trong Kim, Vietnamese firms must carefully research Saudi purchasing habits and preferences, with an emphasis on quality. In terms of food, companies need to cooperate with importers on food hygiene and safety certified by the Saudi General Department of Food and Drug Administration (SFDA) and Halal Certification Agency. Other commodities need to be certified by the Saudi Standards Organization (SASO) equivalent to ISO 9001 standard.

“Arabs prefer eye-catching designs and therefore, Vietnam should pay attention to labels and packaging,” Tran Trong Kim advised.

In order to support businesses in cooperation and exchange, the Vietnamese Trade Office in Saudi Arabia has summarized information from importers of agricultural products for the Asia-Africa Market Department under the Ministry of Industry and Trade to pass on to Vietnam’s enterprises. In addition, the trade office has also sent agricultural product samples to Saudi importers so that they can evaluate and compare the quality and prices with similar products from other countries.

Thu Phuong