AsemconnectVietnam - Wood pellets and wood chips are a bright spot in the shipment of forestry products, said head of the Wood Chip Section under the Vietnam Timber and Forest Product Association (Viforest) Thang Van Thong.

Statistics from the General Department of Vietnam Customs showed that wood chip exports brought home 1.1 billion USD in the first seven months of this year while wood pellets earned 380 million USD.
Following the heated growth in the last half of 2022, the average export price of wood pellets decreased by nearly 3% to around 157 USD per tonne in the first half of this year.
The Republic of Korea (RoK) and Japan have been the two major importers of wood pellets from Vietnam, accounting for nearly 100% of the total volume and value of Vietnam’s exports to all markets since 2019. During January-June, Japan spent over 195 million USD on importing more than 1.16 million tonnes of pellets from Vietnam, up 5.65% in volume and 28.88% in value year-on-year.
Meanwhile, the RoK imported over 840,000 tonnes of pellets valued at nearly 116 million USD, down over 33% in volume and almost 43% in value annually.
For wood chips, China and Japan were the largest importers of this product from Vietnam, making up nearly 95% of the total volume and value of Vietnam’s exports in 2022 and over 90% in the first half of this year.
China consistently accounts for over 60% of Vietnam’s total export value. However, there has been a significant decrease in demand in China this year while Japan also experienced a slight decline, leading to a drop in the export prices of wood chips.
In September, Vietnam’s total forestry product exports surpassed 1.28 billion USD, up 7.3% after a prolonged period of decline. As a result, the overall decrease in forestry product exports was reduced to 20.6%, with a total value of 10.44 billion USD in the first nine months of this year.
Thong noted with delight that following the direction of the Prime Minister and with the drastic actions by the Ministry of Finance, the General Department of Taxation and local tax authorities, businesses in the wood industry, primarily those involved in wood chip and pellet processing, have been refunded 2 trillion VND in value-added tax (VAT).
This will provide capital to support their operations in the coming time and ease the challenges faced by the wood industry due to limited orders, he said.
UKVFTA: pushing the timber industry towards sustainability
The wood industry of Việt Nam must focus on building brands based on the development of transparent and sustainable value chains. The UK – Việt Nam Free Trade Agreement (UKVFTA) was providing a significant push moving the timber industry towards sustainability – a vital factor for the industry to be able to take advantage of opportunities from the trade deal to expand exports to this selective market.
Ngô Sỹ Hoài, Deputy Chairman cum General Secretary of the Việt Nam Timber and Forest Products Association (VIFORES), said the UKVFTA which took effect in May 2021 helped Việt Nam maintain and increase exports to the UK, despite Brexit in January 2020.
The UK was an important export market of Việt Nam’s wooden products in Europe, accounting for around 30-40 per cent of Việt Nam’s export value to the EU.
VIFORES’ statistics showed that Việt Nam’s exports of timber and wooden products to the UK rose by more than 18 per cent to reach US$256 million in 2021. Notably, around 92 per cent of wooden products exported to the UK were valuable woodwork and furniture.
Vietnamese timber market sees improvement, especially to non-traditional export markets like India and Middle East
Although Vietnam’s wood industry is still facing many difficulties, wood and wood product exports have shown positive signals with orders coming from key markets such as the US and Europe, and businesses are likely regaining consumers.
This lead to increased demand for imported wood raw material for the manufacture value-added products for export. Imports of roundwood and sawnwood from the EU are expected to increase slightly from now to the end of 2023.
India and Middle East offer new opportunity for Vietnam’s timber exporters. With the sharp fall in exports of wood products to traditional and well-established markets such as the US, China, Japan, South Korea and the EU, India and the Middle East are emerging as new opportunities for Vietnamese exporters.
Outlook for wood products exports to UK remains optimistic
Wood and wood product exports to the UK, as well as other major export markets, are expected to recover this year after a significant drop, industry experts have predicted.
Ngô Sỹ Hoài, vice chairman of the Vietnam Timber and Forest Products Association, said exports to the UK were worth US$124 million in the first eight months, a year-on-year decrease of 26.5 per cent.
Việt Nam also earned $28 million from the export of non-timber forest products (rattan, bamboo, rush, carpet, etc.) to the UK in the first eight months, a 3.6 per cent year-on-year decrease.
Exports of wood and non-timber forest products to the UK were worth a total of $152 million, he said.
The UK is among the crucial export markets for Vietnamese wood products and serves as their gateway to Europe. Vietnamese woodworking firms have shown great interest in this market.
The export of wood and wood products to the UK is relatively stable and substantial, usually accounting for a third of the total exports to the EU, Hoài said.
The UK-Việt Nam Free Trade Agreement signed in May 2021 is an important continuation of trade facilitation between the two countries after the UK exited the EU.
Tariffs for bilateral trade are replicated from the EU-Vietnam Free Trade Agreement.
The agreement has enhanced opportunities to export Vietnamese products through the increased access to the UK market.
Therefore, there are no policy difficulties when exporting to the UK.
Currently, Vietnamese firms can only export outdoor furniture and handicrafts to the EU, mainly Germany, the Netherlands and Belgium, but can sell a lot of interior furniture to the UK, said Nguyễn Chánh Phương, deputy chairman of the Handicrafts and Wood Industry Association of HCM City (HAWA).
T.Huong
Source: Vitic/VNA