Malaysia to Apply 6,000 Criteria on Imports by 2010

Seafood: Vietnam’s fish export ranked eighth out of 83 countries exporting to Malaysia (only after Thailand, Indonesia, China, India, Pakistan, Taiwan and South Africa) and accounted for 7.83 per cent of Malaysia’s total imported seafood market. Vietnamese shrimp ranked third out of 46 countries exporting to Malaysia (after Thailand and China), accounting for 6.67 per cent of Malaysia’s import market. Crab, jellyfish and mollusc also ranked third (after Thailand and China), and accounted for 1.98 per cent of Malaysia’s total import value. Demand for seafood products in Malaysia has increased steadily. Malaysians consume on average 45 kg of seafood a year. The figure is estimated to reach 61 kg per year in 2010. Vietnam has the chance to increase seafood export to this market also because it needs seafood not only for domestic consumption, but for the export processing industry as well, which is rather developed in Malaysia. Moreover, the Malaysian government advocated plans to develop the seafood processing industry to supply the Muslim world. Export output is estimated to grow at 20 per cent per year in the next few years.

 

Machinery and equipment: The export value of this commodity group ranked second among Vietnamese commodities exported to Malaysia. Electric generators accounted for 0.43 per cent of Malaysia’s total import market share, office equipment and data processing equipment 1.42 per cent, telecom equipment and recorders 0.07 per cent, electronics and electronic equipment 0.38 per cent, mechanical machinery 0.06 per cent, and bike and bike parts 0.22 per cent. In general, the export of these commodities is estimated to increase by 15-20 per cent annually, especially electronics products, because Malaysia is the third largest exporter of electronics equipment after the United States and Japan, and Malaysian-invested enterprises in Vietnam export electronics parts to the Malaysian electronics industry.

Woodwork: The export of woodwork products has increased continuously in recent years. Vietnam is now the third largest exporter of this commodity to Malaysia. Finished and semi-finished wood products rank seventh out of 65 countries exporting to Malaysia, accounting for 2.27 per cent of Malaysia’s total import market share. Furniture ranked seventh out of 69 countries, accounting for 4.45 per cent of Malaysia’s total import market share.

Rubber and rubber products: Rubber now accounts for 5.34 per cent of Malaysia’s total import market share, ranking sixth out of 21 nations exporting this product to Malaysia, after Thailand, Japan, Myanmar, the Philippines and Indonesia. Rubber products were positioned 15^th out of 56 countries exporting to Malaysia, accounting for 1.36 per cent of the market.

Other industrial products: Vietnam’s footwear export now ranks second out of 39 nations exporting to Malaysia, accounting for a 5.93 per cent market share. Garment and textile export placed fourth out of 68 countries, with 14.45 per cent of the market. Plastics ranked 20^th out of 70 countries, holding a 0.47 per cent market share. Cardboard ranked 25^th out of 77 countries, with 0.37 per cent of the market. Chemical and chemical products are 20^th out of 77 countries, or 0.66 per cent of the market. Soaps and detergents ranked 8^th out of 40 countries, accounting for a 2.72 per cent market share. Coffee held second place among 34 countries, with a 38.84 per cent market share. Tea placed fifth among 33 countries, taking up 4.15 per cent of the market. The export of these commodities is forecast to increase by 15- 20 per cent in the following years.

Peanut: Previously, Vietnam shipped 10,000 – 13,000 tonnes of peanut to Malaysia. However, unlike Chinese and Indian peanuts, Vietnamese peanuts have inconsistent quality, bad preserving techniques and unhygienic processing. But, Malaysian people are keener on Vietnamese peanuts because of better taste. Vietnam can export more than 10,000 tonnes of peanut to this market because this is a favourite dish of Malaysians.

Rice: Malaysia can satisfy some 70 per cent of rice demand and it imports 150,000 – 200,000 tonnes annually. Vietnam can still sell rice in this market because, in addition to satisfying domestic demand, rice is also re-exported to Indonesia and Fiji. Rice and cereals imported from Vietnam accounted for 3.5 per cent of Malaysia’s import market. Nonetheless, Malaysia tends to need more high quality rice, and uses technical barriers to encourage the production of good rice. The Malaysian government also encourages its companies to invest abroad to meet domestic demand. Malaysia has set up rice processing joint ventures in Vietnam, which exported rice to Malaysian supermarkets. Vinh Long branded rice is an example.

Vegetable and fruit: At present, green dragon fruit is the main exported fruit to Malaysia. Each month, Vietnam exports 20 - 30 containers of dragon fruits to Malaysia. Apart from green dragon fruit, Vietnam also exported cabbages and onions to this market. Sweet potato (Japanese variety) has also reached this market but the volume remains small. Green dragon fruit accounts for some 0.35 per cent of Malaysia’s import value. Malaysia also imports green dragon fruits to produce canned juice. However, Malaysia is growing more than 40 hectares of green dragon trees and some hectares are bearing fruit. The price of green dragon fruit is twice than that in Vietnam, while the market demand is much higher than the supply. If we cannot produce new varieties of green dragon fruits, our market share will be shrunk.

Handicraft: Malaysian women and international tourists to Malaysia (over 15 million people a year) are very keen on Vietnamese handicraft products. A Malaysia woman has 40 sets of clothes a year (shirts, dresses, hats and scarves), which are decorated by pins and others. Decorations are made from gold, silver and gemstone as well as fake gold, silver and gemstone, which are imported from Indonesia, Thailand, China, India, Bangladesh, Pakistan and Turkey. Distribution networks have been well developed by Chinese and Indian merchants. Vietnam has also joined this market segment, but the market share is small because of uncompetitive prices. According to market surveys, Vietnamese handicrafts look beautiful but the techniques are very poor, the silk is easily creased and loses colour, lacquers do not have smooth surfaces and bamboo items are often mouldy. These may be the reasons for the fall in export value of these items to Malaysia in recent years. Vietnamese exporters do not necessarily print or decorate anything related to the Koran on their products, such as pictures, notebooks, greeting cards, sculpture, films, laser disks, floppy disks, publications and clothes.

Vietnam incurred high trade deficit with Malaysia, but the ratio seems to slow down. In 2003 and 2004, the trade deficit was over 100 per cent against Vietnam’s export to Malaysia. It fell to 32.56 per cent in 2005, 17.58 per cent in 2006 and over 20 per cent in 2007. According to Matrade, production inputs like petroleum products, timbers, wood planks, plywood, plastic resins, chemicals, apparel materials, machinery, equipment and electronic parts accounted for 85.28 per cent of Vietnam’s total import from Malaysia in 2005, 78.88 per cent in 2006 and 80.3 per cent in the first 11 months of 2007. The export turnover of Vietnam to Malaysia is forecast to slow down in the coming years, after several years of strong growth (averaging over 30 per cent, with the record 129.71 per cent in 2000). Nonetheless, annual export growth is expected at 15 - 20 per cent because the Malaysian government is restructuring its industrial production with focus on high-tech and biotech industries. It is shifting labour intensive and polluting industries to countries with lower labour costs, including Vietnam and Cambodia. In addition, many Vietnamese exports to Malaysia are on the top of major imports of Malaysia as the demand is on the rise thanks to higher living standards. Seafood is an example. To maintain the export growth, apart from favourable objective conditions such as industrial restructure in Malaysia, Vietnam should reduce the trade deficit, ensure stable supplies of goods, and export goods of high quality and competitive prices. Last but not least, we should organise export goods trade fairs in Malaysia.

Vietnamese enterprises should pay attention to standardising export goods to meet the requirements set by importing nations. Malaysia manages imported and exported goods in accordance with specific standards. Thus, imported goods must satisfy its criteria. As of October 31, 2007, Malaysia applied 4,776 quality criteria and it plans to apply some 6,000 criteria by 2010, on both Malaysian and international products, because they are built on international criteria. As a result, we cannot penetrate this market if our quality is not good enough.