Vietnamese farm produce seeks path to Middle East

Statistics released by the Ministry of Agriculture and Rural Development show that export-import revenue between Vietnam and the Middle East reached newly US$10.89 billion in 2016, up more than 100% from 2011.

However, Vietnam mainly ships electronics and spare parts, and garments-textiles to the Middle East, which make up 68.4% of the country’s export value to the region of US$8.06 billion.

Meanwhile, the region needs about 5-7 million tonnes of rice each year, along with vegetables, fruits, juice and seafood, which are among Vietnam’s strengths.

Vo Quang Huy, Director of Huy Long An Co., Ltd., said the Middle East in general and Iran in particular are promising markets for banana exports, adding that his company used to deliver bananas to the region but had difficulties in the payment process.

To export bananas to the Middle East, a company needs high-quality post-harvest preservation while bananas grow all across Vietnam, he said, noting transportation as another obstacle.

Le Thanh, Director of the Institute of Vietnam Organic Agricultural Economics, described the Middle East as an “attractive paradise” for Vietnamese goods and a huge market for the country’s farm exports.

However, he said, Vietnamese exporters still face barriers regarding logistics and payment.

Ministry of Agriculture and Rural Development Nguyen Xuan Cuong, said the Middle East is a gateway to Europe, highlighting the potential for export-import activities between Vietnam and the Middle East.

Tran Van Tri, Director of An Viet International Investment JSC and Chairman of the Vietnam-Iran Business Council, said Iran is a promising market for Vietnamese electronics, garments-textiles and agricultural products like banana, pineapple, lemon, rice and seafood.

Iran imports about 1.2 million tonnes of rice each year, he said, adding that An Viet International Investment JSC, the first Vietnamese firm licensed in Iran, recently shipped 207 tonnes to the country and aims to deliver another 200,000 tonnes in 2018.

He also said that payment issues remain the major barrier to bilateral trade.

Le Quang Nhuan, General Director of Louis Rice Import Export Co., Ltd., suggested Vietnamese exporters cooperate with each other to hire a transportation company, explaining that transportation costs greatly impact on goods prices.

According to the Commercial Counsellor at the Vietnamese Embassy in Iran, the country imports about 600,000 tonnes of bananas and 300,000 tonnes of rubber each year, noting that Iran can buy up to 500,000 tonnes of Vietnamese rubber annually.

Regarding the payment barrier, the State Bank of Vietnam said Vietnamese commercial banks put themselves at risk when conducting payment activities in Iran.

The central bank is expected to support one or two commercial banks to establish cooperative ties and payment channels with their Iranian counterparts.

Experts suggested Vietnam set up a production chain to ensure product quality, while paying attention to Halal certificates for the Muslim-majority countries in the Middle East.