AsemconnectVietnam - Vietnam’s exports of wood and wooden furniture were estimated to reach only about 13.5 billion USD in 2023, down by 15.5% year on year, according to the President of the Vietnam Timber and Forest Product Association (VIFOREST) Do Xuan Lap.

Mr. Lap said that 2023 was a challenging year for Vietnam's timber industry. A sharp decline in consumer demand in key export markets such as the US and the European Union has resulted in a remarkable reduction in orders. Many businesses have been compelled to scale back production, and some even faced a risk of closure.
Major export markets are increasingly enforcing stricter regulations on the legality and sustainability of products. Specifically, the EU Timber Regulation (EUTR), effective from late June, stipulates that products imported into this market must ensure legality and do not cause deforestation.
In both domestic and foreign markets, there is a growing demand for low carbon emissions throughout the supply chain to achieve net-zero goals. Products with high carbon content will face diminished competitiveness in the market, he said.
To Xuan Phuc, Managing Director of Forest Trends’ Forest Policy, Trade and Finance Initiative, said about 77% of Vietnam’s wood exports to the EU belong to wood furniture category (HS 9401 and HS 9403) while the remainders are wood and raw materials (HS 44). In the first 11 months of 2023, the export turnover of wood and wooden furniture to the EU dropped by 32% year on year.
EU buyers did and will apply various voluntary sustainable production and consumption standards for wood products, such as those with the Forest Stewardship Council (FSC) certification for sustainable forest management. Additionally, Vietnam and the EU have signed the Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (VPA/FLEGT), under which, Vietnam committed that all wood products exported to the EU are legal, he added.
According to the official, the industry’s growth will slow down, by some 10-12% in 2024 compared the late quarters of 2023. The key focus for next year is to establish an image of sustainable development for the Vietnamese timber industry, based on using certified wood and creating products with reduced emissions.
Wood processing industry is expected to see slow export growth in 2024
The wood industry market shows some signs of recovery, yet 2024 still poses some potential difficulties for the industry.
Growth is expected to slow by about 10 – 12% compared to the last quarters of 2023.
Do Xuan Lap, chairman of the Vietnam Timber and Forest Products Association (VIFOREST), gave the forecast at a recent seminar on sustainable development and challenges for the wood industry held by VIFOREST, along with various associations and member organisations, and Forest Trends in Hanoi.
This year is challenging for Vietnam's wood industry. Consumer demand in main export markets such as the US and the EU has dropped sharply, leading to a decline in orders. Many businesses have had to reduce production, and some businesses even had to stop production.
Therefore, according to him, Vietnam’s exports of wood and wooden furniture reached only about 13.5 billion USD in 2023, down by 15.5% year on year.
Nguyen Chanh Phuong, vice chairman and general secretary of the Handicraft and Wood Industry Association of HCM City (HAWA) also said that the businesses have had recovery in export orders to have enough jobs for workers. Some of them have started to purchase raw materials and prepare for production to meet demand in next year's peak season.
He said the recovery of the wood industry being sustainable or not, will depend on the fair season in March-April of 2024.
Vietnam's wood product processors must adapt to overcome existing difficulties, including new regulations in key export markets, according to VIFOREST.
Currently, global markets have not shown many signs of a quick recovery in purchasing power for wood products, especially the US market which has often ordered over 50% of Vietnam's export wood products.
Most wood processing enterprises in Vietnam have received orders again, but they are still facing many difficulties and are operating at moderate production levels.
The world situation is still too uncertain, so the domestic wood processing industry's prospects for recovery and growth in 2024 will be very challenging, insiders said.
For niche markets, the wood processing enterprises certainly will not ignore opportunities to enter those markets, including strict markets, they said, adding this will minimise risks in export.
CK
Source: VITIC/Vietnamplus.vn