The Middle East market has a lot of potential for export businesses when the demand for spices is relatively large. However, when exporting to this region, businesses also need to pay attention to specific certifications such as Halal certification.
On the afternoon of July 27, the Trade Promotion Department (Ministry of Industry and Trade) coordinated to organize a consultation session on exporting spices to the Middle East and Africa markets.
UAE – An intermediary market for Vietnamese spice exporters
According to Mr. Truong Xuan Trung – Vietnam Trade Counselor in the UAE, the UAE market has a very open policy, most businesses in the world open their headquarters here, including Europe, the Middle East, Asia… On the other hand, the UAE’s customs law is identical with that of the Middle East (GCC), so once exported to this country, when exporting to GCC countries, it will not be subject to the second import tax.
Thus, this is considered an intermediate market for enterprises to export to and re-export to other countries.
Besides, the UAE is a Muslim country, so the demand for spices here is relatively large. Unlike a Muslim country like Indonesia (which has many similarities in spices with Vietnam), the UAE has many gaps for Vietnamese spices to have the opportunity to penetrate because of the complementary and agricultural nature of the country. This country also accounts for only 0.9% of the UAE’s economic structure.
Enterprises when exporting here also need to pay attention to Halal certification standards (certificate, certifying that the product does not contain banned substances as required by Shari’ah Islamiah – Islamic law).
| Halal certification logo enters the UAE market. |
The income of the people of the UAE is relatively high, reaching 42,969 USD/person, so the cost of food consumption is very large, promoting the increased demand for food, leading to an increase in the demand for spices.
Although not a market with a large population, however, the number of tourists coming here is relatively large. In 2021, the UAE’s Dubai Expo event attracted more than 20 million international tourists. In addition to the main activities, the country also organizes world-class events. The number of tourists to the UAE is also a potential customer that Vietnamese spice exporters need to pay attention to.
When exporting to this market, businesses need to pay attention to the problem of labels. In particular, the product must have the full name of the product, additives, quantity, name and address of the manufacturer, country of origin, expiry date, etc.
In addition, from 2018 until now, the UAE has started to apply 2 import taxes (before 2018 there were none), in which the import tax applied to most goods is 5%, especially for alcohol is 50 %. % and tobacco is 100%.
Opportunity to export spices to other markets
For the market Saudi Arabia, According to Mr. Tran Trong Kim, in charge of the Vietnam Trade Office in Saudi Arabia, this market consumes many different spices, but it is still mainly pepper, cinnamon and anise. In food, the Saudis use a lot of spices, and the habit of buying a lot and often is also an opportunity for Vietnamese spice exporters.
The main distribution channels in this market are supermarkets, hypermarkets, and retail stores. Regarding taxes, currently Saudi Arabia levies from 1 to 12% on imported goods.
Mr. Kim also said that when exporting to this market, enterprises should pay attention to the following 5 points. Firstly, at present, many importers require Vietnamese businesses to pack their brands, so Vietnam’s brand in Saudi Arabia is relatively lackluster. Therefore, businesses need to pay attention to branding to create a sustainable export foundation.
Second, the trend of Arab consumers is going green, prioritizing the use of healthy foods. Third, businesses need to pay in the form of L/C to ensure safety. Fourth, do not transact with a partner, but businesses will lose brokerage fees and investment approval fees because this is a fee that businesses do not need to spend. Fifth, the import partner of Saudi Arabia gives priority to refer to the sample directly, businesses should send samples to the partner to increase the ability to export.
In addition, in some other markets such as Iran or South Africa, spices are also very popular. In particular, in South Africa, this country’s consumers especially love spicy products such as chili, ginger… In Iran, this country especially loves Vietnamese products, on the other hand, Vietnamese spices are also very popular. will not be competitive in this market because the spices of the two countries are complementary. Each year, this market imports about 170,000 tons of spices/year. Iran is considered the center of the region’s spice concentration and a transit point to other regions.
Vietnam is the largest pepper exporting country in the world
Meanwhile, in 2021, according to data from ITC, Vietnam is the world’s largest pepper export market, reaching $950 million, accounting for 44.4% of the world’s total pepper export value. In addition, some other products also accounted for a large market share such as cinnamon accounting for 27%, reaching 275 million USD; recovery accounted for 8.6%, reaching 115 million USD…
Regarding pepper, a representative of the Vietnam Pepper Association (VPA) cited data from the Ministry of Agriculture and Rural Development, saying that Vietnam’s pepper output in 2022 is estimated at 175,000 tons, down 10%. compared to 2021.
In the first 6 months of 2022, Vietnam exported 125,553 tons of pepper, reaching 568.8 million USD. Compared to the same period in 2021, the export volume of pepper decreased by 19.1% but the turnover increased by 13.5%. Vietnam’s pepper is currently ranked No. 1 in terms of output, accounting for 55% of the global market share.
The largest export items are whole black pepper, reaching 89,823 tons, equivalent to $ 380.2 million; ground black pepper reached 16,027 tons, equivalent to 73.9 million USD; Whole grain white pepper reached 13,354 tons, equivalent to 78.6 million USD…
The US is the largest import market of Vietnam’s pepper, reaching 30,109 tons, down 8%, followed by the UAE, India, Germany… In the Middle East and Africa, the UAE is the largest import market. the most, reaching 10,292 tons; second is Iran, reaching 2,054 tons; Egypt reached 1,645 tons…
Meanwhile, cinnamon is the third largest agricultural product in the world, accounting for 16.9% of the global market share, reaching 41,000 tons (after Indonesia, China). Vietnam’s total cinnamon growing area reaches 150,000 hectares, mainly concentrated in Yen Bai, Lao Cai, Son La…
In the first 6 months of 2022, Vietnam exported 34,250 tons of cinnamon, worth $151.8 million, down 9.7% in volume and up 14.6% in value. Major markets all saw a decrease in imports such as India, the US, Indonesia… Some markets recorded an increase such as Bangladesh, South Korea, the Netherlands, Brazil…
