Africa, Middle East markets: Untapped potential for Vietnam

Increasing export turnover

Do Quoc Hung, deputy head of the Asia-Africa Market Department under the Ministry of Industry and Trade, told participants at a conference on facilitating Vietnam’s agricultural and fishery exports to the Middle East and Africa that over the past few years, exports of Vietnam’s agricultural and fishery products to those markets have been flourishing. The Ministry of Foreign Affairs organized the conference on economic diplomacy.

In 2017, Vietnam’s agricultural exports to the Middle East and Africa reached US$824.1 million and US$131.2 million, while fishery exports to these markets stood at US$254 million and US$95.2 million, respectively.

Rice, coffee, pepper, Tra fish, shrimp, canned tuna are Vietnam’s main exports to Africa, while coffee, pepper, cashew, tea, rice, fruit and vegetables are the main exports to the Middle East.

Exports to the Middle East and Africa are attractive to Vietnamese manufacturers given the relatively short distance to these destinations and the relaxed safety and hygiene requirements.

Untapped potential

Despite the positive export data, the figures are still modest compared to the potential. Import turnover of agricultural products and food of the Middle East and Africa reached US$81 billion in 2017 and is expected to increase to US$180 billion by 2025.

According to Do Quoc Hung, the Middle East and Africa need to be prioritized in Vietnam’s export strategy. However, the new markets are rather difficult to access due to a number of specific issues, such as political instability in some countries, frequent legislative changes, cultural and religious differences, high transportation costs, food habits and business practices, risky payment methods, and lack of market information.

Businesses are facing trademark issues, use of prohibited substances in aquaculture, and types and designs unsuitable to consumer tastes.

The Middle East and Africa mainly import high-quality white rice and basmati rice, whereas Vietnamese rice is generally not high quality, leading to lower prices compared to rice from Thailand, for example. There are no free trade agreements with African and Mideastern states, while Vietnam’s export methods have not met the consumption habits of Islamic countries in terms of packaging, distribution, tastes, and Halal food certification, hampering exports of agriculture and fishery products to these large potential markets.

Working together to promote trade

Do Quoc Hung recommended promoting bilateral cooperation through the joint committees and intergovernmental committees between Vietnam and countries in the Middle East and Africa, in addition to promoting brand development for Vietnamese agricultural and fishery products.

He also said that information plays a big role in promoting trade and investment activities. He urged both sides to pay attention to the development of information and communications in order to create rich and reliable information sources on these markets, thereby raising awareness on both sides regarding potential trade.

According to Doan Phuong Lan, deputy head of the Department of General Economic Affairs under the Ministry of Foreign Affairs, the ministry has been coordinating with relevant state agencies in the support of Vietnamese businesses through public-private partnerships in host countries, as well as advising and providing market information through economic diplomacy.

Through 17 Vietnamese representative offices, Vietnamese businesses can receive assistance in verifying partner capacity in order to minimize risks in the investment process and expand cooperation. In addition, the offices can help businesses connect with local authorities and reputable local business associations to enhance trade promotion.