Vietnam Wants to Promote Trade With Middle East, Africa

Text of report in English by Vietnamese newspaper Thanh Nien on 5 September

Untapped and largely unknown markets offer Vietnamese businesses some lucrative opportunities.

With the government targeting stronger trade relations with Middle Eastern and African countries this year, Vietnamese businesses should be working harder to take advantage of these new markets, a trade expert has said.

Vietnam has signed many agreements with Middle Eastern and African countries, including Oman, Sudan and Namibia, covering the areas of trade, technology and science and sea transportation.

Representatives from the United Arab Emirates (UAE) and Saudi Arabia visited Vietnam recently to try to set up wide-ranging bilateral trade relationships, Huynh Tan Phong, deputy director of the Ho Chi Minh City Investment and Trade Promotion Centre told a conference in HCMC last month.

The Middle Eastern trade missions offered a great opportunity as Vietnam’s traditional export markets, such as the US and Europe, had raised import barriers and demand from those markets had fallen, Nguyen Cong Hien, deputy head of the Ministry of Industry and Trade (MIT) office of African, western and southern Asian markets, said at the conference.

Vietnamese businesses, however, have yet to make good use of their advantages.

“The pity is that Vietnam fails to export many items in high demand in those markets, although the country has the capacity to supply those items,” said Dang Ngoc Quang, the government’s commercial counsellor to Egypt and Israel.

For instance, earlier this year Egypt experienced some civil unrest because of rice shortages but Vietnamese companies failed to grab the chance to supply rice to this market, Quang said.

Items such as seafood, pepper, tea and coffee are in demand in Africa but Vietnam has yet to improve sales channels there.

Although the country is now facing barriers in those markets, “the barriers are not complicated,” Quang said.

The major problem, according to Quang, is that Vietnamese businesses don’t understand consumer trends in these countries.

Products sold in many Middle Eastern and African countries require instruction and information in Arabic and some items require halal certification to ensure Muslim food preparation rules have been met.

But Vietnamese exporters fail to take these things into consideration, so their items do not sell well, Quang said.

Vietnamese businesses, in fact, have not conducted much research in these markets.

“Trade promotion should be conducted after extensive research and field tests,” Quang said.

Quang suggested Vietnamese businesses hire market research companies to research trends at local supermarkets and wholesale markets.

Research could also be carried out at local trade fairs.

“[Market researchers] should talk to retailers and then approach traders to learn about the local customs of goods delivery and reception,” he said.

The export revenue from Vietnam to Middle Eastern countries since the beginning of this year is US$700 million and is expected to reach $1.2 billion by the end of 2008, a 71 per cent year-on-year increase.

Egypt now is Vietnam’s largest market in Africa, Quang said.

Vietnam is expected to report export turnover of $200 million from the African country.

Saudi Arabia and South Africa are other high-potential markets.

Back to an old market

Vietnam’s export revenue to Iraq this year has increased by more than 10 times compared to the same period last year, Quang said.

This proves Vietnam has come back to its one-time largest farm produce export market after years of being cautious about the country’s security.

“Vietnamese businesses have a correct view of the situation in Iraq,” he says.

“However, they need to try harder because Iraq is not embargoed anymore and many other countries also care about the market.”

In 2002 Vietnam achieved export turnover of $750-800 million to the Middle Eastern country.

Tea is one of major Vietnamese export products to Iraq with the export output of 15,000 tons ($2,000 per ton).

Originally published by Thanh Nien, Ho Chi Minh City, in English 5 Sep 08.

(c) 2008 BBC Monitoring Asia Pacific. Provided by ProQuest LLC. All rights Reserved.