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OIC countries suffer US$63bn trade deficit in halal products; Turkey, Indonesia, Malaysia top exporters

Leaders at the 38th Ministerial Session of the COMCEC of the Organisation of Islamic Cooperation in Istanbul. (SPA)
  • The bloc's exports of halal products equaled US$275 billion, while their imports totaled US$338 billion last year, says the 2022 Annual OIC Halal Economy Report
  • While OIC countries remain import reliant for the food, pharmaceuticals and cosmetics sectors, they are net exporters of apparel and footwear products, it adds

ISTANBUL, Turkey — The member states of the Organization of Islamic Cooperation (OIC), according to the 2022 Annual OIC Halal Economy Report, recorded a trade deficit of US$63 billion for halal economy products in 2021, covering food, fashion, pharmaceuticals and cosmetics.

Their exports equaled US$275 billion and imports totaled US$338 billion. Only 18 percent of these imports were sourced intra-OIC, while only three OIC countries (Türkiye, Indonesia, and Malaysia) made it to the top 20 exporters of halal economy products, the report said.

The report, commissioned by the Islamic Centre for Development of Trade (ICDT) and produced by DinarStandard, a US-based research and advisory firm, was launched in Istanbul on November 29th, 2022 at an event attended by ministers of OIC member countries, and representatives from OIC organs.

Also Read Islamic nations seek to turn crisis into opportunity with enhanced relations, trade amidst recession fear

“For close to four decades, ICDT has strived to facilitate trade and investments across OIC countries by promoting halal economy products and services, developing partnerships and strategic alliances between stakeholders of member states, helping disseminate information on intra-OIC supply and demand and fostering best practices. With this report, we aim to inspire and empower OIC countries to act cohesively, promote inclusive growth and increase the OIC’s share in the halal trade and investments ecosystem with integrity and purpose”, said Latifa El Bouabdellaoui, Director General, ICDT.

The launch of the 2022 Annual OIC Halal Economy Report in Istanbul.

While OIC countries were import reliant for the food, pharmaceuticals and cosmetics sectors, they were net exporters of apparel and footwear products, having exported products worth US$101.94 billion in 2021, while imports equaled US$34.96 billion, resulting in a positive trade balance of US$66.98 billion.

Investments

Meanwhile, in terms of investments, OIC Member States received a total of 180 investments across the eight sectors of the halal economy, with 120 disclosed deals worth US$7.9 billion in 2021.

Driving OIC member countries opportunity in halal trade and investments is its halal lifestyle consumer demand ($1.7 trillion in 2021) representing 79 percent of the global spend ($2.1 trillion).

Leaders at the 38th Ministerial Session of the Standing Committee for Economic and Commercial Cooperation of the Organisation of Islamic Cooperation in Istanbul. (SPA)

Specifically, Muslim spend on food by consumers in OIC countries was valued at US$1.07 trillion in 2021, forecasted to reach US$1.5 trillion by 2026. This presents a strong window of opportunity for OIC countries to ramp up production, leverage growing consumer demand for healthy and organic food products, and adopt digitalization across the industry.

Islamic finance assets in OIC countries were worth US$3.32 trillion in 2020 and are forecast to reach US$4.82 trillion by 2025, at a CAGR of 7.9 percent. In 2021, deals in finance constituted 23 percent of all transactions in OIC countries.

Turkey among top 20 halal product exporters

Turkey is one of only three member states of the OIC that are among the world’s top 20 halal economy exporters, according to a report released yesterday by the intergovernmental organization.

Indonesia and Malaysia are the other two nations in the 57-member Muslim bloc that are in this category, said the 2022 Annual OIC Halal Economy Report.

OIC member countries made up six of the top 10 global markets for Muslim consumer spend on media and recreation in 2021. Muslim consumers from OIC Member Countries spent an estimated US$141 billion on media and recreation in 2021, forecasted to reach US$231 billion by 2026.