Exports to Middle East and Africa: Untapped opportunities

                                        Rice exports to Africa have increased rapidly

Maintaining a trade surplus with the Middle East and Africa for the past many years, Vietnam is diversifying exports to these potential markets. However, according to experts, many businesses have yet to take enough export opportunities and still hesitate to expand operations in these markets.

Potential markets

With total area of more than 36 million sq.km and combined population of nearly 1.5 billion, the Middle East and Africa have demand to import a variety of products which are key Vietnamese exports. These are potential export markets for Vietnamese businesses, Vietnam Trade Promotion Agency (Vietrade) Deputy Director Ta Hoang Linh said in a recent workshop in Hanoi. Last year, Vietnamese exports to the Middle East and Africa reached about US$6.2 billion, with telephones and components accounting for 62 percent of the total. Agricultural products such as rice, coffee, and pepper are well-selling in these markets. In the first half of this year, Vietnam exported about US$5.1 billion worth of goods to these markets.

Ngo Khai Hoan, Deputy Director of the MoIT’s African, West and South Asian Markets Department, said Middle Eastern and African countries have high demand for imports such as food, agricultural products, seafood, consumer goods, and milk, so there are opportunities for Vietnamese businesses to boost exports to these markets, especially Gulf Cooperation Council (GCC) member countries which apply low taxes ranging from zero to five percent to imports from non-GCC countries. Moreover, Middle Eastern countries have high demand for construction materials, electrical wires and cables, interior furniture, processed food, milk and milk products, and office equipment, which are Vietnam’s advantages.

Obstacles

Although Vietnamese exports to the Middle East and Africa have grown continuously and rapidly, domestic businesses have yet to make the most of opportunities. Main reasons include geographical distance leading to high transportation costs. Moreover, many kinds of Vietnamese exports can hardly compete with Chinese, Thai, and Malaysian products. Muslims account for about 40 percent of the African population. It means that Vietnam needs to have Halal certification for products from slaughtered animals before exporting to Africa, and this takes time.

To overcome these difficulties, in the opinion of Ngo Khai Hoan, businesses need to seek information about their partners through the Vietnamese trade offices and embassies in the Middle East and Africa. In addition, they need to have strategies to enhance their competitiveness, focusing on improving and expanding distribution channels; actively participate in trade promotion activities including market research, fairs and exhibitions. They are also suggested to find the way to take advantage of preferences from free trade agreements.

Nguyen Huong / ven.vn