Opportunity for export to Hungarian market

The two-way trade revenue between Vietnam and Hungary in the first four months of 2023 reached US$344.88 million, down 17.9 percent compared to the same period last year, of which the export turnover stood at US$128.74 million, down 44.4 percent, and the imports reached US$216.14 million, up 14.5 percent. Computers, electronic products and components were Vietnamese highest exports to Hungary, valued at US$48.52 million, down 70.4 percent year on year.

High opportunity for Vietnamese farm produce to be exported to Hungary - Photo: Vu Sinh

This is also the main reason for the decrease of Vietnam’s total export turnover to Hungary during this period.

Regarding imports, Vietnam’s largest imports from Hungary in the first four months of 2023 were animal feed and raw materials, reaching US$94 million, down six percent; followed by machinery, equipment and spare parts with US$63.1 million, up 14 percent; other commodity groups, up 105.8 percent; and pharmaceutical products, down six percent.

Despite difficulties in the growth of bilateral trade turnover, the Vietnam Trade Office in Hungary emphasized that the EVFTA will continue to open up great opportunities for Vietnamese enterprises to develop trade and investment in the EU market in general and Hungary in particular in the coming time.

Notably, although the trade turnover remains low, a number of Vietnamese agricultural exports to Hungary such as cashew nuts, pepper, and coffee accounted for a relatively high proportion of Hungary total imports of these goods, which shows the firm position of Vietnamese products in the local market, and potential opportunities for Vietnamese enterprises to increase exports to Hungary.

However, due to distinctive and traditional characteristics of the Hungarian market in Europe and consumer habits, Hungary’s largest trading partner is still the EU, accounting for over 75 percent of the country’s total import and export turnover.

In addition, the majority of the Hungarian market is dominated by multinational companies, large corporations, distributors and international retailers, while Hungarian enterprises are mostly small- and medium-sized enterprises; therefore, they order Vietnamese goods from major European distributors and then redistribute them in Hungary.

The most disadvantageous factor for exports to Hungary lies in the geographical difficulties, as Hungary does not have seaports. Normally, goods exported from Vietnam to Hungary all arrive at ports in some European countries such as Germany, the Netherlands, Italy... and are then transported to Hungary by road, leading to higher import costs. On the other hand, because the VAT in Hungary is very high (27 percent), many businesses import goods from Vietnam, but go through customs clearance procedures in some EU countries at lower VAT rates.

The Vietnam Trade Office in Hungary added that as Hungary does not usually holds large international fairs and exhibitions, the effective ways are to organize a business delegation to Hungary and make direct contact with local partners, participate in business seminars to promote Vietnamese exports, and proactively search for local importers and distributors.