Seizing opportunities to export agricultural products to the UAE

At the end of October, the Vietnam-UAE Comprehensive Economic Partnership Agreement (CEPA) was signed, becoming the first free trade agreement that Vietnam has signed with an Arab country, an important premise for Vietnam to promote the export of key products to the United Arab Emirates (UAE), including key agricultural products such as seafood, rice, vegetables, coffee, pepper, etc.
Fruit and vegetable exports have many opportunities for growth in the UAE. Photo: Processing watermelon at Thabico Tien Giang Food Industry Joint Stock Company. (Photo: NGUYEN SU)
Fruit and vegetable exports have many opportunities for growth in the UAE. Photo: Processing watermelon at Thabico Tien Giang Food Industry Joint Stock Company. (Photo: NGUYEN SU)

According to the Department of Multilateral Trade Policy under the Ministry of Industry and Trade, the UAE is currently one of Vietnam’s leading important trade and investment partners in the Middle East region, a gateway for Vietnam to access markets in the Middle East as well as West Asia and Africa.

A potential market

Statistics from the General Department of Customs show that in the 2018-2023 period, the total trade exchange between the two countries averaged about 5 billion USD/year. In terms of trade balance, Vietnam always had a large trade surplus with the UAE market, at 3-4 billion USD/year. This result is contributed by many agricultural sectors, as Vietnam’s agricultural exports to the UAE have recorded growth in recent years.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), in the period of 2018-2022, the UAE ranked 16th in shrimp imports from Vietnam, accounting for about 0.5% of the total value of Vietnam’s shrimp exports to markets. Each year, Vietnam's shrimp export turnover to the UAE reaches about 20 million USD.

Although small, this is a potential market because the demand for seafood, including shrimp, is increasing day by day. Ms. Phung Thi Kim Thu, Shrimp Market Expert at VASEP, said: The signing of CEPA will open up more opportunities for shrimp exports to the UAE. In the first 9 months of 2024, shrimp export turnover to this market reached 7.4 million USD, accounting for 0.3% and growing 34% over the same period in 2023.

Vietnam is also the largest supplier of pangasius in the UAE, accounting for 40-50% of the market share. The UAE has many suitable factors to become an important seafood trading partner of Vietnam when the average seafood consumption per capita in this country is higher than the world average.

Because the agricultural economic structure of the UAE only accounts for about 1%, up to 90% of the seafood consumed must be imported. On the other hand, the growing population, high income, and the increasing interest of young people in seafood protein with online searches for seafood products skyrocketing in recent years are the premise for the potential consumption of seafood there.

In addition, data from the Import-Export Department (Ministry of Industry and Trade) shows that in the first 8 months of 2024, the UAE has become the third largest pepper export market of Vietnam, after the US and Germany, with a volume of 11,779 tons, worth nearly 61 million USD, an increase of 30.5% in volume and up to 100.2% in value compared to the same period in 2023. Therefore, CEPA is expected to be a great opportunity for the Vietnamese pepper industry to increase turnover in this market.

Increasing competitiveness for agricultural products

It can be seen that the CEPA Agreement is a great opportunity for Vietnamese agricultural products to penetrate deeply into the UAE market when this country commits to eliminating tariffs according to the roadmap for 99% of Vietnam's export turnover to the UAE; at the same time, Vietnam also commits to eliminating tariffs according to the roadmap for 98.5% of UAE's export turnover to Vietnam. The agreement also includes many regulations to facilitate trade and investment in line with current trends of digital transformation and green development.

However, in order to effectively utilise the CEPA Agreement, increase agricultural, forestry and fishery exports to the UAE, Vietnamese agricultural sectors also need to promote existing advantages and further improve product quality to increase competitiveness, with a focus on developing agricultural products and Halal food for Muslims.

According to VASEP, in the UAE, Vietnamese enterprises must compete directly with enterprises from several other countries that have signed FTAs with the UAE, such as: India, Indonesia, Israel, and Turkey. Specifically, with shrimp products, Vietnam must compete with shrimp from India, China, and Ecuador.

While Indian shrimp accounts for nearly 60-70% of the market share, Vietnam's shrimp market share is only about 5-7%. Therefore, in the coming time, along with taking advantage of tariff advantages, enterprises need to change production and management methods, reduce intermediate costs to increase product competitiveness, and promote the development of a Halal certification system for shrimp products when exporting to this market.

According to First Secretary, Head of the Vietnam Trade Office in the UAE Truong Xuan Trung, the UAE is becoming an attractive market for agricultural and food exporters. Although it is an open market with almost no trade barriers, the UAE is a fiercely competitive market. Exported products must ensure food hygiene and safety, the rate of chemicals and pesticides must not exceed the permitted level, not to mention a series of Halal regulations for imported food and beverages.

To support Vietnamese enterprises exporting to the UAE, since the beginning of the year, the Vietnam Trade Office in the UAE has also had many trade promotion measures, such as: coordinating with the Dubai Chamber of Commerce to organise the sending of Dubai business delegations from different fields to Vietnam to attend business forums; working with UAE supermarket chains, such as West Zone and Choithrams, and UAE distribution corporations to prepare for Vietnamese trade promotion delegations; and support a number of corporations and businesses to connect with partners and verify information about import partners in the UAE.