Export to Kuwait: Modest turnover

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In the Hanal food market, product groups have the advantage of Vietnam such as tea, seafood or products of cultivated origin. Photo: VNA

Many opportunities for Agricultural and fishery products

According to the Trade Promotion Department (Ministry of Industry and Trade), in recent years, the economic-trade relations between Vietnam and Kuwait have developed quite well. Two-way trade turnover increased sharply since 2018. The data of the General Department of Customs shows that two-way trade turnover between Vietnam and Kuwait in 2021 will reach more than USD 4.78 billion, an increase of about 49% over the same period of the previous year. Vietnam's exports reached more than USD 60 million.

Ms. Nguyen Thi Thu Thuy, Deputy Director of the Export Support Center (Trade Promotion Department) said that Vietnam's main export items to Kuwait include: mobile phones; electronic equipment and spare parts; seafood; wooden; agricultural products (vegetables, tea, rice, pepper, cinnamon, star anise). Of these, wood and wood products account for the highest proportion, and followed by vegetables and fruits, means of transport, and aquatic products. In the opposite direction, Vietnam's imports from Kuwait reached more than USD 4.7 billion, up 49% over the same period in 2020. Imported products are mainly crude oil for the refining and petrochemical activities of Nghi Oil Refinery.

Kuwait is a country located in the Middle East with a population of 4.3 million people and an area of 17,818 km2. In 2021, this country's GDP is estimated at USD208 billion, up 2.3%. GDP per capita is about USD52,000. Kuwait has an open economy, develops foreign trade, attracts foreign investment and is one of the commercial and financial centers of the Middle East. Notably, Kuwait's export turnover is about USD60 billion/year (mainly oil exports) and import is about USD30 billion/year. Thus, Vietnam's import-export turnover with this market is still quite modest compared to its potential, especially export turnover.

The 82% of the country's area is desert, besides oil revenue, Kuwait has not yet produced many agricultural, industrial and consumer goods. Besides, Kuwait's GDP per capita is high, so consumer demand for goods is very stable.

“So, in the future, Vietnam can boost the export of agricultural products; Seafood; wood and wood products; machinery, equipment, tools and spare parts... are items that the Kuwaiti side is in demand," said Mr. Tran Trung Hieu, Second Secretary, Vietnam Trade Office in Kuwait.

Note the requirement for Halal certifications

To promote the export of goods to the Kuwait market, Mr. Ali Al Sayegh, President of Lemonade International Company on conference and exhibition management (in Kuwait) and President of the International Portal Company Regarding import and export (in Vietnam), said that when doing business with the Kuwait market, businesses need to pay attention to market demand in order to have products that are suitable for cultural factors, and at the same time, products can compete with products from other countries such as China and Thailand.

Banana exports to the Kuwait market is a specific example; Mr. Tran Trung Hieu said that currently, Kuwait is importing bananas mainly from the Philippines and Ecuador with a fairly large output. Vietnam's banana products can be brought to the Kuwait market, but it is necessary to find out and choose a distributor of fresh fruit or some supermarkets, a centralized distribution system to sell to East Asians and South Asians at reasonable prices.

Mr. Hieu also said that one of the items currently being focused by state management agencies, promoting export promotion to the Kuwait market and the Middle East is green tea. In the Middle East, tea is a rather specific product that is widely consumed; tea drinking culture use up to 90% black tea. Green tea is not well known to the market, so the potential is quite large.

Similarly, with other items that are interested by many Vietnamese enterprises, learn to promote exports to the Kuwait market such as dry noodles and pho, and instant food; the second Secretary, Vietnam Trade Office in Kuwait emphasized that there are not many dry noodle or pho products in this market. However, businesses still need to pay special attention to the tastes of Kuwaitis to build an effective market penetration plan.

Some argue that when focusing on promoting exports to the Kuwait market, businesses must necessarily pay attention to the characteristics of Kuwait, which is an Arab culture, Arabic language and orthodox Islam. Therefore, businesses need to have export products in accordance with Islamic quality standards. For example, businesses need to pay attention to taboo products such as: alcoholic beverages; pork products.

In addition, with Kuwait or the Middle East market, businesses need to pay special attention to the requirements for Halal certification. The Muslim market has large purchasing power and high demand for Vietnamese products without many technical barriers and tariffs, but products are often required to have Halal certification. Depending on the export market, enterprises learn about Halal certification regulations such as: Malaysian regulations; regulations of Gulf countries (2017); Indonesian regulations; UAE regulations (GAC+ESMA)…