The Middle East has a population of about 2 billion people, most of whom are Muslims, and is a huge market for Halal food. This could be a “gold mine” for Vietnamese export businesses, especially in the agricultural sector. However, to penetrate this market, Vietnamese businesses will have to overcome many challenges...

According to statistics from the Asia-Africa Market Department, Ministry of Industry and Trade, in 2022, the trade turnover of Muslim countries will reach about 2,300 billion USD, of which the main imported items are food, pharmaceuticals, cosmetics and fashion.

FOOD MARKET OF OVER 1.4 TRILLION USD

At the workshop “Potential to promote Halal agricultural products in the Middle East market” recently organized by the Trade Promotion Agency, Ministry of Industry and Trade, Ms. Nguyen Minh Phuong, Head of the West Asia and Africa Department, Asia - Africa Market Department, said that Muslims alone spend about 1,400 billion USD on food each year. Because many countries are located in dry climates, not suitable for cultivation, leading to high demand for food imports. This is a great opportunity for Vietnamese products to penetrate this market.

However, in order to be able to export to member countries of the Gulf Cooperation Council (GCC), Vietnamese enterprises need to comply with Halal standards prescribed by the GSO (GCC Standardization Organization) standards, including: food and agricultural products must be produced from raw materials that do not contain ingredients considered Haram (prohibited under Islamic law); The production and packaging process must ensure Halal integrity; ensure food hygiene and safety issues, consumer health safety and regulations of Vietnamese law; products must be packaged and clearly labeled according to the regulations of the Halal Assurance System (HAS).

Mr. Le Chau Hai Vu, a Halal food quality consultant and Director of Consultech Joint Stock Company, said that the global Halal market is worth more than 2,000 billion USD and is estimated to increase to 2,800 billion USD in the coming years. This is truly a potential market for Vietnamese agricultural products.

Only counting the member countries of the Organization of Islamic Cooperation (OIC), the total trade turnover of Halal food has reached 444.7 billion USD, with an import value of 265.1 billion USD.

Among the members of the OIC, Vietnam has a great advantage when it is located in the same region as the two largest Halal food importing countries, Indonesia and Malaysia, with turnovers of 25.8 billion USD and 22.74 billion USD, respectively.

Another large market that businesses need to pay attention to is the region of the countries of the Cooperation Council of the Gulf States with high average income and developed economies, of which the most prominent are Saudi Arabia and the United Arab Emirates (UAE) with Halal food import values ​​of 19.87 billion USD and 17.74 billion USD.

Not only Muslim countries but also countries like the US, Russia and European countries have large imports of Halal food because these products are of high quality and comply with strict food safety standards.

Another notable point is that for the same item, the price of Halal certified products is always 5-10% higher. This is an opportunity to increase profits for Vietnamese businesses.

VIETNAMESE ENTERPRISES PARTICIPATE IN HALAL IS STILL LIMITED

Despite listing great opportunities when penetrating the Halal market, experts said that not many Vietnamese enterprises can penetrate this market, due to the following three reasons.

First, currently there are only 2 domestic establishments licensed to grant Halal certification to Vietnamese enterprises, the largest of which is HCA Vietnam Company. Due to the lack of Halal certification agencies, some enterprises have been forced to seek foreign companies to qualify for exporting goods.

Second, Vietnamese enterprises, especially small and medium enterprises, still have weak thinking and operational management skills; lack of investment in production equipment as well as quality control tools; infrastructure has not been well planned to optimize production and meet food safety and hygiene standards.

Third, businesses face strong competition from other countries that have established a foothold in the Halal market, the strongest of which are India, Brazil and the US....

Source: VnEconomy