Fluctuations in supply chains and consumer demand in some ASEAN markets, where many Muslims live, have created unprecedented opportunities for Vietnamese exporters, say people in the industry.
Người Lao Động (The Labourer) newspaper reported that Kelly Lương, director of Beyond World Company, said her company is partnering with the Ho Chi Minh Trade and Investment Promotion Center (ITPC). Together, they will organize a Vietnamese business trip to Malaysia to explore the halal market and meet directly with some importers of halal products from that country.
Following a seminar on promoting exports to the Malaysian market held in Ho Chi Minh City in June, many exporters who wanted to offer halal products to ASEAN markets contacted his company. His company was able to connect several Vietnamese agricultural and food processing companies to sell halal products to Malaysia, including big brands like Bidrico and TH True Milk.
According to the Vietnamese ambassadors to Malaysia and Indonesia, the supply chain disruption caused by the COVID-19 pandemic and tensions between Russia and Ukraine have opened up unprecedented opportunities for Vietnamese exporters.
For example, Malaysia has a shortage of chicken and rice, so it wants to expand its imports of these items from Vietnam. In the specific case of rice, the country has increased the import quota for Vietnamese rice from 520,000 tons to 700,000 tons every year, because Russia and Ukraine have stopped exporting wheat.
Regarding the Indonesian market, Trần Phú Lữ, deputy director of the ITPC, said that this country, with a population of 270 million inhabitants, is one of the lucrative import markets for Vietnam.
Two-way trade saw a 40% year-over-year increase to $11.4 billion. Trade in the first seven months of 2022 exceeded $8 billion, up 23% year-on-year, with seafood and coffee being the largest export items.
Many companies have considered Indonesia to be an easier market than the United States, Europe and Japan. Similarity in culture, close geographical distance and preferential tariffs within the bloc have also been cited as advantages for Vietnamese products to penetrate this market, Lữ said.
Difficulty competing on price
Despite the opportunities available in the ASEAN halal food market, Vietnamese exporters have so far only exported a small amount of halal products to some countries in the region.
Nguyễn Ngọc Luận, founder and CEO of Meet More Coffee, told Người Lao Động that his company had not yet received orders to export agricultural products to ASEAN markets such as Malaysia, Indonesia and Brunei.
Luận said it was difficult for his company and buyers in those countries to find a common voice. In addition to the requirement for halal certification and a separate production line for halal products, the two parties had to agree on the selling price.
supply chain disruption caused by the COVID-19 pandemic and tensions between Russia and Ukraine have opened up unprecedented opportunities for Vietnamese exporters
Vietnamese companies lag behind some neighboring countries, such as Thailand, in deep processing technology, making it difficult for them to compete on price. Although the ASEAN halal market has a lot of potential, your company will only conquer the regional market after successfully penetrating distant markets such as the US and the EU.
For his part, the director of a Ho Chi Minh seafood processing company also said he had not found an opportunity to sell products to ASEAN halal markets, despite successfully exporting to the Middle East for many years.
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The director, who wanted to remain anonymous, attributed this unsatisfactory result to the fact that ASEAN countries had many similarities in products, so Vietnamese goods did not have a competitive price advantage.
Malaysia has a shortage of chicken and rice, so it wants to expand its imports of these items from Vietnam
Trương Tiến Dũng, Permanent Vice President of the HCM City Food and Foodstuffs Association, said that most Indonesian and Malaysian buyers want Vietnamese companies to build new factories to produce goods for them, as these importers are not satisfied. with the current separate production line for halal products in the factories of domestic companies.
However, it was not feasible for Vietnamese companies to invest in a separate factory to handle small orders when taking the first steps to penetrate new markets, Dũng said.
Trần Việt Thái, Vietnam’s ambassador to Malaysia, urged companies to have specific strategies to enter this halal market from consulting, training, cooperation and investment.
Thai also said that Vietnam needs a unified agency to run the halal market. The Ministry of Agriculture and Rural Development could propose to the Government the creation of this agency, which would facilitate the connection of the ambassadors.
Article republished from the Vietnamese state media VNA as part of an agreement between both parties to share content. Link to original article:https://vietnamnews.vn/economy/1339443/viet-nam-sees-great-potential-in-asean-halal-market.html
