According to statistics from the Asia-Africa Market Department of the Ministry of Industry and Trade, the trade value of Islamic countries reached approximately $2.3 trillion in 2022. The main imports included food, pharmaceuticals, cosmetics, and fashion.
THE FOOD MARKET IS WORTH MORE THAN $1.4 TRILLION
At a workshop on “Promoting Halal Agricultural Products to the Middle East Market” held by the Trade Promotion Agency of the Ministry of Industry and Trade, Ms. Nguyen Minh Phuong, Head of the West Asia and Africa Department, Asia-Africa Market Department, stated that Muslims spend approximately $1.4 trillion on food annually. Due to the arid climate in many of these countries, which is not suitable for cultivation, there is a high demand for food imports. This presents a significant opportunity for Vietnamese products to penetrate this market.
However, to export to the member countries of the Gulf Cooperation Council (GCC), Vietnamese enterprises need to comply with Halal standards as stipulated by the GSO (Gulf Standardization Organization) standards. These include: food and agricultural products must be made from ingredients that do not contain any components considered Haram (forbidden under Islamic law); the production and packaging processes must ensure Halal integrity; ensuring food safety and hygiene, as well as the health and safety of consumers, and compliance with Vietnamese laws; and products must be properly packaged and labeled according to the requirements of the Halal Assurance System (HAS).
Mr. Le Chau Hai Vu, a consultant on Halal food quality construction and director of Consultech Joint Stock Company, shared that the global Halal market is valued at over $2 trillion and is estimated to grow to $2.8 trillion in the coming years. This market holds great potential for Vietnamese agricultural products.
Considering only the member countries of the Organization of Islamic Cooperation (OIC), the total trade value of Halal food reached $444.7 billion, with an import value of $265.1 billion.
Within the OIC, Vietnam has a significant advantage due to its proximity to the two largest Halal food importers in the region, Indonesia and Malaysia, with trade values of $25.8 billion and $22.74 billion, respectively.
Another important market that enterprises should pay attention to is the Gulf Cooperation Council countries, which have high average incomes and developed economies. The most prominent among them are Saudi Arabia and the United Arab Emirates (UAE), with Halal food import values of $19.87 billion and $17.74 billion, respectively.
Not only Islamic countries but also nations like the United States, Russia, and European countries have a large import volume of Halal food due to the high quality and stringent food safety standards associated with these products.
Another noteworthy point is that, for the same item, Halal-certified products are always priced 5-10% higher. This presents an opportunity for Vietnamese businesses to increase their profits.
VIETNAMESE ENTERPRISES’ PARTICIPATION IN HALAL IS LIMITED
Despite outlining the significant opportunities in the Halal market, experts shared that not many Vietnamese enterprises have been able to penetrate this market, due to the following three reasons.
First, currently, only two organizations in Vietnam are authorized to issue Halal certificates to Vietnamese enterprises, with the largest being HCA Vietnam. Due to the limited number of certifying bodies, some businesses have had to turn to foreign companies to meet the requirements for exporting goods.
Second, Vietnamese enterprises, especially small and medium-sized enterprises, often have weak management and operational capabilities; lack investment in production equipment and quality control tools; and face challenges with infrastructure that has not been well planned to optimize production and meet food safety and hygiene standards.
Third, businesses face intense competition from other countries that have already established a strong presence in the Halal market, with India, Brazil, and the United States being the strongest competitors.
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The General Statistics Office has recently released information that the total value of goods exports and imports in the first two months of the year reached $113.96 billion, an increase of 18.6% compared to the same period in 2023. The trade balance for goods exports exceeded $4.72 billion (compared to $3.5 billion in the previous year).
The Billion-Dollar Export Markets of Vietnam
As of May 2024, Vietnam’s cumulative trade turnover for the year reached a remarkable $238.95 billion, reflecting a significant 15.1% increase compared to the same period in 2023. This equates to an impressive $31.35 billion surge in trade value. The country’s top export markets include the economic powerhouses of the United States and China, highlighting Vietnam’s growing importance in global trade.
