In the first 9 months of 2024, exports from Vietnam to Malaysia reached 3.81 billion USD, up 3.5% over the same period last year. Notably, rice exports achieved a growth rate of 131.2%, surpassing all types of phones and components...

According to the General Department of Vietnam Customs, the total export turnover between Vietnam and Malaysia in the first 9 months of 2024 reached 10.63 billion USD, an increase of 14.1% over the same period in 2023; of which, exports reached 3.81 billion USD, a slight increase of 3.5%; imports reached 6.82 billion USD, a sharp increase of 21.1% over the same period.

Because exports only increased slightly, while imports increased rapidly, the trade balance was in deficit of 3.0 billion USD, an increase of 54.6% over the same period. In absolute value, the trade balance deficit was equal to 76.4% of the export value and increased to nearly 1 billion USD.

MALAYSIA INCREASES BUYING VIETNAMESE RICE

Notably, the two items that always account for the largest proportion of exports are computers, electronic products and components, and iron and steel of all kinds, all of which decreased in the 9 months.

Specifically, the item with the largest turnover (accounting for 12.2%) is computers, electronic products and components, down 4.0%, iron and steel of all kinds decreased slightly to 0.5%. This is the reason why exports to Malaysia increased slowly.

The highlight in the 9 months was rice exports, when they achieved a growth rate of 131.2% and became a major export item, accounting for 9.8%, ranking 3rd among the largest export items of Vietnam to Malaysia, surpassing phones of all kinds and components (accounting for 8.5%).

Thus, Malaysia has increased its purchase of rice from Vietnam, more than luxury consumer goods such as phones.

Along with rice, other agricultural products such as coffee also had impressive growth of 117.5% compared to the same period last year, however, this is mainly green coffee as raw material for Malaysia's coffee industry, not showing the market penetration of Vietnamese coffee brands.

Regarding imports, it is noteworthy that computers, electronic products and components regained the first position with a proportion of 24.1% and increased to 25.8%, pushing petroleum products down to the second position with only 21.0% in proportion and this item also increased to 25.6%, the reason being the reduction of import tariffs in ASEAN countries, causing a shift in imports to Malaysia. These are also the two items with the largest proportion and surpassing the remaining items (all with proportions of less than 10%).

Most imported items from Malaysia increased sharply, except for electric wires and cables, which decreased slightly by 1.5%. The items with the strongest increases include: Liquefied petroleum gas increased by 262.6%, rubber increased by 141.4%, glass and glass products increased by 48.9%, paper of all kinds increased by 63.9%, common metals increased by 37.3... Other machinery, equipment and spare parts also increased by 11.8% but accounted for 7.5%, second only to the two largest imported items from Malaysia.

TAKING ADVANTAGE OF PURCHASING POWER TO BOOST EXPORTS

According to the Vietnam Trade Office in Malaysia, Vietnam's exports to this country have many opportunities because the market has good purchasing power, diverse needs and a close cultural connection with Vietnamese goods.

The Malaysian market is open and the barriers to Vietnamese exports are relatively low due to its participation in many regional trade liberalization agreements.

On the other hand, this country is lacking domestic supply of many essential foods such as rice and seafood, but the Government has strong policies to support domestic businesses and farmers.

However, the difficulty for Vietnamese products is fierce competition with other exporting countries, especially China, Thailand, Indonesia, etc. because the Malaysian market is relatively open to imports.

Food products require Halal certification, while the issuance of this certification is not managed by Vietnamese state agencies, but recognized by government agencies of some Muslim countries. Currently, there is only one non-governmental organization that issues Halal certificates in Vietnam recognized by JAKIM (under the Ministry of Religious Affairs of Malaysia).

Furthermore, many Vietnamese enterprises are hesitant to approach the market due to language barriers, cultural differences, etc. In addition, many cases of fraud have occurred, reducing trust in trade because enterprises do not contact the Trade Office for support in verifying partners.

Many businesses are afraid to set up distribution channels for their products, send samples, participate in fairs or meet customers locally and limit investment in product innovation to suit local consumer tastes, while local consumers are used to contacting goods from competitors.

To avoid risks when exporting to Malaysia, the Trade Office recommends that Vietnamese businesses, before paying for goods or making deposits for new businesses that have not met in person, need to check the business registration information of the business, including the business name and business registration number and send it to the Trade Office for verification.

For food exporting businesses, it is necessary to pay attention to exporting Halal-certified food products to the Malaysian market due to the large proportion of Muslims in Malaysia and only choose products that are Halal-certified.

Malaysia is strengthening control over the cost of living due to a shortage of some food supplies, businesses producing essential products such as eggs, rice, etc. should pay attention to connecting with the distribution system to increase exports...

Source: VnEconomy