UAE – VIETNAM’S SECOND LARGEST CHARCOAL EXPORT MARKET IN WEST ASIA

The United Arab Emirates (UAE) is currently the second largest charcoal export market for Vietnam in West Asia in 2022. With a rapidly growing economy and increasing energy demand, the UAE has become a key destination for Vietnamese charcoal exporters looking to expand their market presence in the region.

Overview of Vietnam’s charcoal export markets in the UAE

Overview of charcoal exports from Vietnam

In 2022, Vietnam exported $90.4 million worth of charcoal, making it the fourth-largest charcoal exporter in the world. That same year, charcoal ranked as the 318th most exported product from Vietnam. 

According to Volza’s Vietnam Export data, from March 2023 to February 2024, Vietnam exported a total of 27,963 shipments of charcoal to 3,167 international charcoal buyers. This represents an impressive growth rate of 45% compared to the previous twelve months.

Coconut-charcoal-has-become-very popular in key-global-markets-particularly-in-the-UAE-Korea-and-Japan
Coconut charcoal has become very popular in key global markets, particularly in the UAE, Korea, and Japan

Overview of Vietnam’s charcoal exports to the UAE

Bilateral trade between Vietnam and the United Arab Emirates (UAE) has maintained a stable growth rate despite unfavorable global trade conditions. The UAE remains Vietnam’s second largest export market in the Middle East, while Vietnam ranks among the top 10 largest import partners for the UAE globally. According to the United Nations COMTRADE database on international trade, Vietnam’s charcoal exports to West Asia in 2022 were led by Saudi Arabia at $6.19 million, followed by the United Arab Emirates as the second-largest at $3.5 million.

Potential of Vietnamese charcoal exports to the UAE

Speaking at the ‘Doing Business with Vietnam’ event on May 9, 2024, Mohammad Ali Rashed Lootah, Chairman and CEO of Dubai Chambers, emphasized the strong trade and investment opportunities available for Dubai businesses in Vietnam. He stated, ‘Vietnam possesses immense growth potential due to its favorable economic policies, robust infrastructure, skilled workforce, and the country’s strategic location.

Advantages of Vietnam in charcoal exports to the UAE

Vietnam possesses significant advantages in exporting charcoal to the UAE, establishing itself as a leading supplier in this lucrative market. 

  • Favorable trade policies: The competitive pricing of Vietnamese charcoal, combined with efficient logistics and transportation networks, allows for cost-effective shipping to the UAE. The ongoing negotiations for the Comprehensive Economic Partnership Agreement (CEPA) further enhance trade opportunities by reducing tariffs and trade barriers. 
  • High-quality products: The country is renowned for its high-quality charcoal, which features low ash content and superior burning efficiency, making it ideal for both grilling and industrial use. Vietnam’s rich biodiversity provides access to abundant hardwood resources, ensuring a consistent supply of premium charcoal products. You can refer to the types of charcoal offered by PNP Charcoal here- Export companies in UAE.

 These advantages position Vietnam as a key player in the UAE’s charcoal market, fostering strong economic ties between the two nations.

Challenges of Vietnam in charcoal exports to the UAE

Despite its advantages, Vietnam faces several challenges in exporting charcoal to the UAE. 

  • Intense competition: The market is becoming increasingly competitive, with other countries also vying for a share of the UAE’s charcoal imports, making it crucial for Vietnam to differentiate its products effectively.
  • Stringent quality requirements: The stringent quality standards and regulations imposed by the UAE require Vietnamese exporters to ensure compliance, which may necessitate investments in quality control and certification processes
  • Geographical distance: Due to the considerable geographical distance between Vietnam and the UAE, Vietnamese goods face challenges with higher shipping costs compared to freight charges from countries located closer to the UAE.

    Kaya-charcoal-made-at-Tay-Nguyen-province-is-exported UAE
    Kaya charcoal made in Tay Nguyen province is exported UAE

Government coordination with relevant ministries and sectors

To promote Vietnamese goods in the UAE market, the Ministry of Industry and Trade has recently collaborated with relevant ministries and sectors to organize various trade promotion activities as part of the national trade promotion program.

Alongside national trade promotion initiatives, the Ministry has also partnered with UAE authorities to hold events such as trade connection workshops, logistics seminars, and programs to connect Vietnamese products with UAE distribution chains, achieving many positive results.

The-meeting-between-Minister-of-Foreign-Affairs-Bui-Thanh-Son-and-Minister-of-Foreign-Affairs-of-the-United-Arab-Emirates-Sheikh-Abdullah-bin-Zayed-Al-Nahyan
The meeting between Minister of Foreign Affairs Bui Thanh Son and Minister of Foreign Affairs of the United Arab Emirates (UAE) Sheikh Abdullah bin Zayed Al Nahyan

According to the Ministry of Industry and Trade, Vietnam and the UAE are currently accelerating negotiations to finalize the Comprehensive Economic Partnership Agreement (CEPA). The signing of the CEPA holds significant importance, marking a pivotal milestone in the cooperative and friendly relations between Vietnam and the UAE, particularly in terms of economic, trade, and investment collaboration.

Conclusion of Vietnam’s charcoal export markets in the UAE

The future growth potential of Vietnamese charcoal exports to the UAE remains promising. With the rising energy demand in the UAE and the strategic efforts of Vietnamese exporters to strengthen their market presence, Vietnamese charcoal is set to become a top choice in the West Asian market. 

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