Proper solutions needed to tap into huge potential for exports to Iran

Vietnam’s annual trade turnover with Iran stands at a modest level of over US$100 million in recent years.

Lam Thanh Hung Trading Co., Ltd, a Vietnamese enterprise that imports interior decoration products, Persian carpets, saffron, roses, functional foods from Iran for sale in the Vietnamese market. It also promotes the export of Vietnamese coffee, tea, cinnamon, anise, pepper, and apparel to the Iranian market.

Nguyen Thi Hien Giang, director of Lam Thanh Hung Trading Co., Ltd who has over eight years of experience living and working in Iran, said that the Middle Eastern country is not only a potential market for local goods, especially agricultural items, it also serve as the "gateway" for to penetrate the vast market.

Iran is the eighth largest cotton producer and ranks third in terms of grape production globally.

Most notably, many Vietnamese enterprises import saffron, a very famous Iranian product. Despite this, Iran's agricultural output is not enough to meet the needs of the local 86 million market, therefore it has a great need for imports from other countries and desires trade connectivity with Vietnam.

“In Iran, each person consumes about 120kg of fruit per year. Tropical fruits are very popular in the Middle East nation, such as pineapple and mango. Each year, this market imports roughly 470,000 tons of tropical fruits, equivalent to about US$700 million. If doing well with market connectivity, Vietnam can completely export items such as dragon fruit, guava, pomelo, and papaya to Iran," said Giang.

In addition, the prominent habits in relation to the consumption culture of Iranians indicates that there remains ample room for tea and coffee exports to grow this potential market. Currently, Iran primarily imports raw coffee, black tea, and green tea. Meanwhile, Vietnam is capable of boosting the export of these key agricultural products to Iran in the near future, she added.

Nguyen Thanh Long, third secretary of the Vietnam Trade Office in Iran concurrently Syria and Iraq, noted the great opportunity for local firms to bolster exports to Iran, especially local agricultural products thanks to growing import demand as the Middle Eastern country often suffers droughts and crop failure.

A survey conducted on people and importers in Iran indicates that consumers there are fond of Vietnamese products, while both nations' products are often supplementary and not competitive.

According to Nguyen Thu Thuy, deputy director of the Export Support Center under the Trade Promotion Department of the Ministry of Industry and Trade, with a population of nearly 86 million people, Iran represents a market boasting a large consumption volume among countries throughout the Middle East.

Vietnam and Iran has so far signed a number of co-operation agreements regarding economic, cultural, scientific, and technical co-operation. This is addition to the establishment of a joint committee, investment promotion, and protection. The agreements offer favourable conditions in which both sides can enhance trade exchanges moving forward, Thuy stated.

As a way for Vietnamese enterprises to conduct long-term business with their Iranian counterparts,  according to experts, due attention must be paid to dealing with forms of payment. This should be done alongside promoting direct connection with Iranian partners through participation in fairs, seminars, and annual trade connection programmes with the Iranian market.

Moreover, it can be viewed as essential to fully grasp market information, carefully search and choose the right, strong, and suitable products, as well as not competing with Iranian items when exporting to this market. The ingenuity and skillfulness in negotiating with Iranians will also help bring many great business opportunities for local enterprises, experts added.