Since May this year, the Vietnamese firms have been importing a significant amount of raw wood materials which rise by 5-10% per month. This is a sign that they are actively preparing for end-of-year orders, he added.
Ample room to fuel exports with wood pellets
Vietnam boasts great potential to bolster exports of wood pellets as global demand for the fuel pellets is increasing, according to insiders.
Vietnam, the second largest wood pellet producer in the world, after the US, recently inked a deal to provide wood pellets for Japan over three years, according to the wood pellet branch under the Vietnam Timber and Forest Product Association (VIFOREST).
In the first six month of this year, Japan – one of three biggest importers of Vietnamese wood pellets splashed out 195 million USD on purchasing 1.16 million pellets from Vietnam, up 28.88% in value and 5.65% in volume as compared to the same time last year.
Shipments to the Republic of Korea (RoK) have also showed signs of growth recently.
Wood enterprises step up trade promotion due to lack of orders
Wood producers and exporters are pinning high hope on trade fairs and expos, as the lack of orders is causing difficulties for their production and business activities, according to insiders.
In the first seven months of this year, the export turnover of wood and wood products reached only 7.1 billion USD, down 25% year-on-year.
Notably, the demand of the US – a key export market which accounts for about 60% of the export turnover of Vietnam's wooden products, has fallen sharply for a long time and has not shown any signs of recovery.
Tran Hoai Huu, Manager of Gia Nhien Company specialising in the production of sailboat models for export, said that the number of the company’s orders from the US has dropped to a very low level, equal to only 20-30% of that before the COVID-19 outbreak.
Vienam mostly exports wood pellets to RoK, Japan
The Republic of Korea (RoK) and Japan have become the biggest importers of Vietnamese wood pellets, accounting for over 95% of Vietnam’s total export of this product, reported the Vietnam Timber and Forest Product Association.
The wood pellets exported to the RoK are primarily made from by-products of the wood processing industry, such as sawdust, wood shavings, and leftover wood scraps. The exporters are mostly in the southeastern region where wood furniture factories are concentrated.
In the first five months of this year, the volume of wood pellets exported to the RoK reached 0.65 million tonnes, equivalent to 96.1 million USD in value, representing a decrease of 41% in volume and 45% in value year-on-year.
Meanwhile, the Japanese market has shown high stability in both volume and price. In January-May, Vietnam's exports of wood pellets to Japan reached 0.87 million tonnes worth 151 million USD, down 5.7% in volume and up 19.7% in value annually. The orders received are mostly long-term contracts.
According to the General Department of Vietnam Customs, Vietnam exported 1.57 million tonnes of wood pellets valued at around 256.5 million USD in the first five months of this year. Exportation is currently on an upward trend.
Major wooden furniture fair set for Dong Nai
The Vietnam Timber and Forest Product Association (VIFOREST) has announced that a wooden furniture fair will be held from September 25 to October 1 in Bien Hoa city, Dong Nai province, the Government News has reported.
With the motto “Turning challenges into opportunities”, the fair is expected to create opportunities to boost output in the country’s timber production and manufacturing sector.
It is designed to help businesses in the industry diversify output, expand business opportunities, increase revenue, and reduce the risk of a dependence on exports.
According to figures from the Ministry of Agriculture and Rural Development, Vietnam’s wood industry raked in $8.95 billion in export turnover in the first eight months of 2023, down 25.1 per cent year-on-year.
With a population of 100 million and rapid urbanization, Vietnam has an estimated 70-80 million sq m of housing built each year, which boosts demands for furniture. However, the domestic wood market remains neglected by local manufacturers.
T.Huong
Source: VNA