Turnover reached 8.78 billion USD but wood industry is facing double difficulties
Tuesday, August 6,2024![](/weblocalfiles/giang/thang8nam2024/682024122557woodindustry1.jpg)
AsemconnectVietnam - In the first 7 months of 2024, wood and product exports earned 8.78 billion USD, however, this industry is facing double difficulties to achieve a target of more than 15 billion USD that has been set.
Wood and product exports recorded double-digit growth
According to a report of Ministry of Agriculture and Rural Development, total export turnover of agricultural, forestry and fishery products in the first 7 months of 2024 reached 34.27 billion USD, up 18.8% (trade surplus of 9.42 billion USD, up 60%) thanks to contribution of most product groups. Notably, wood and forestry product exports earned 9.41 billion USD (up 21.1% over the same period), of which wood and wood products alone earned 8.78 billion USD (up 21.9%).
Mr. Tran Quang Bao - Director of Department of Forestry (Ministry of Agriculture and Rural Development) - said that since the beginning of this year, wood and forestry processing industry has been one of the bright spots in exports, with double-digit export growth.
Notably, exports in the first 6 months of 2024 of some products and key markets have increased again, such as: Wood chips reached 1.36 billion USD, up 37.71% over the same period in 2023, followed by construction wood products reaching 267 million USD, up 31.49% and wooden furniture reaching 3.78 billion USD, up 23.12%. In terms of markets, the United States reached 3.27 billion USD, up 24.41% over the same period in 2023, China reached 716 million USD, up 46.5%, EU reached 281 million USD, up 29.6%.
In general picture of wood and wood products exports, Department of Trade Defense (Ministry of Industry and Trade) has officially announced final conclusion of US Department of Commerce (DOC) in investigation into scope of products and anti-circumvention of wooden cabinets imported from Vietnam. Notably, regarding anti-circumvention investigation, Department of Trade Defense said that DOC has canceled entire anti-dumping/anti-subsidy tax evasion investigation of wooden cabinets imported from Vietnam. This will help Vietnamese wooden cabinets open up to the US market from now until the end of the year.
Market trends contain unsustainable factors
Although wood and forestry product exports in the first 7 months of 2024 have achieved quite high results, in order to achieve export target of 15.2 billion USD, in the last 6 months of 2024, wood and forestry product processing industry will face many difficulties. Accordingly, the world situation continues to fluctuate in a complex and unpredictable manner, with increasing risk and uncertainty, which may cause demand for wood and wood products in the last months of 2024 to not be as good as in the first months of the year. In addition, Vietnam's main wood product export markets continue to face economic difficulties and product protection.
For example, in EU, this market has issued regulations on deforestation prevention (EUDR) to replace EU Timber Regulation (EUTR), in which, in addition to legality requirement, it also adds regulations on deforestation or forest degradation from December 31, 2020. This regulation will be implemented from December 30, 2024, which is a huge pressure on enterprises processing and exporting wood and wood products to EU market in preparing to fully meet requirements of EUDR, especially requirements on geographical indications while EU has not yet had specific instructions and at the same time, some EU importers have requested our exporting enterprises to comply with EUDR.
Korea is the leading import market for plywood products from Vietnam, but currently Korea has conducted a final review of the anti-dumping tax order on plywood originating or imported from Vietnam and on May 27, 2024, issued an investigation conclusion and decided to continue applying anti-dumping tax. Specifically, Vietnamese plywood manufacturing and exporting companies will continue to be subject to anti-dumping tax for the next 5 years, at rates from 9.78% to 32.28%;....
In addition to market factors, Mr. Do Xuan Lap - Chairman of Vietnam Timber and Forest Products Association - said that currently, increased transportation costs have caused input wood prices to increase, with some types of wood currently having an import price increase of 40% compared to last year. This affects cost of output products, while foreign importers are demanding a reduction in product costs.
Mr. Do Xuan Lap said that market trend is containing unsustainable factors. For example, with kitchen cabinets, general market trend of this item is stagnant, with a slight increase at times but not significantly. The reason for market increase is said to be geopolitical conflicts causing logistics costs to increase, pushing up price of goods, so many importers decide to buy goods to stock up in warehouses.
“Looking at the market, many people think it is ‘warming up’, but in reality, the buyers are only buying to stock up in warehouses, while actual purchasing power in the market is decreasing,” said Mr. Do Xuan Lap.
Regarding market trends, Mr. Vu Quang Huy - Chairman of Vietnam Plywood Association - said that demand has increased but is currently being affected by shipping costs. It is forecasted that in the next 3 months, this issue will still have a heavy impact on exports, especially exports to the US, EU, North Africa, India, etc. markets. In addition, cost of raw materials is too high, especially price of rubber wood has increased rapidly, at times increasing by over 1 million VND/m3, causing difficulties for businesses in the wood industry. In 2024, wood industry aims to export 15.2 billion USD, of which wood and wood products are over 14.2 billion USD, an increase of 6% compared to 2023. In order for wood industry to reach the finish line, Mr. Tran Quang Bao said that Forestry Department will continue to promote and introduce Vietnamese wood processing and forestry industry, attract and promote export of wood and forestry products through effective organization of fairs and exhibitions. Continue to coordinate with Trade Defense Department and relevant agencies to update information and have effective solutions to respond to trade lawsuits.
In addition, to prepare legal and quality raw materials for export wood processing industry, Mr. Tran Quang Bao said that Ministry of Agriculture and Rural Development will continue to implement policies to encourage development of large timber, timber with sustainable forest management certification, develop cooperation and link production forest planting with consumption of forest products.
At the same time, pilot issuance of raw material forest planting area codes according to instructions in Decision No.2260/QD/BNN-LN dated July 9, 2024 of Ministry of Agriculture and Rural Development promulgating Document on temporary guidance on issuance and management of raw material forest planting area codes, piloted in the provinces: Bac Giang, Lang Son, Phu Tho, Tuyen Quang, Yen Bai. Then, evaluate on a large scale, aiming to gradually provide wood with legal wood sources to meet requirements of international market, especially the EUDR.
Source: Vitic/ congthuong.vn
According to a report of Ministry of Agriculture and Rural Development, total export turnover of agricultural, forestry and fishery products in the first 7 months of 2024 reached 34.27 billion USD, up 18.8% (trade surplus of 9.42 billion USD, up 60%) thanks to contribution of most product groups. Notably, wood and forestry product exports earned 9.41 billion USD (up 21.1% over the same period), of which wood and wood products alone earned 8.78 billion USD (up 21.9%).
Mr. Tran Quang Bao - Director of Department of Forestry (Ministry of Agriculture and Rural Development) - said that since the beginning of this year, wood and forestry processing industry has been one of the bright spots in exports, with double-digit export growth.
Notably, exports in the first 6 months of 2024 of some products and key markets have increased again, such as: Wood chips reached 1.36 billion USD, up 37.71% over the same period in 2023, followed by construction wood products reaching 267 million USD, up 31.49% and wooden furniture reaching 3.78 billion USD, up 23.12%. In terms of markets, the United States reached 3.27 billion USD, up 24.41% over the same period in 2023, China reached 716 million USD, up 46.5%, EU reached 281 million USD, up 29.6%.
In general picture of wood and wood products exports, Department of Trade Defense (Ministry of Industry and Trade) has officially announced final conclusion of US Department of Commerce (DOC) in investigation into scope of products and anti-circumvention of wooden cabinets imported from Vietnam. Notably, regarding anti-circumvention investigation, Department of Trade Defense said that DOC has canceled entire anti-dumping/anti-subsidy tax evasion investigation of wooden cabinets imported from Vietnam. This will help Vietnamese wooden cabinets open up to the US market from now until the end of the year.
Market trends contain unsustainable factors
Although wood and forestry product exports in the first 7 months of 2024 have achieved quite high results, in order to achieve export target of 15.2 billion USD, in the last 6 months of 2024, wood and forestry product processing industry will face many difficulties. Accordingly, the world situation continues to fluctuate in a complex and unpredictable manner, with increasing risk and uncertainty, which may cause demand for wood and wood products in the last months of 2024 to not be as good as in the first months of the year. In addition, Vietnam's main wood product export markets continue to face economic difficulties and product protection.
For example, in EU, this market has issued regulations on deforestation prevention (EUDR) to replace EU Timber Regulation (EUTR), in which, in addition to legality requirement, it also adds regulations on deforestation or forest degradation from December 31, 2020. This regulation will be implemented from December 30, 2024, which is a huge pressure on enterprises processing and exporting wood and wood products to EU market in preparing to fully meet requirements of EUDR, especially requirements on geographical indications while EU has not yet had specific instructions and at the same time, some EU importers have requested our exporting enterprises to comply with EUDR.
Korea is the leading import market for plywood products from Vietnam, but currently Korea has conducted a final review of the anti-dumping tax order on plywood originating or imported from Vietnam and on May 27, 2024, issued an investigation conclusion and decided to continue applying anti-dumping tax. Specifically, Vietnamese plywood manufacturing and exporting companies will continue to be subject to anti-dumping tax for the next 5 years, at rates from 9.78% to 32.28%;....
In addition to market factors, Mr. Do Xuan Lap - Chairman of Vietnam Timber and Forest Products Association - said that currently, increased transportation costs have caused input wood prices to increase, with some types of wood currently having an import price increase of 40% compared to last year. This affects cost of output products, while foreign importers are demanding a reduction in product costs.
Mr. Do Xuan Lap said that market trend is containing unsustainable factors. For example, with kitchen cabinets, general market trend of this item is stagnant, with a slight increase at times but not significantly. The reason for market increase is said to be geopolitical conflicts causing logistics costs to increase, pushing up price of goods, so many importers decide to buy goods to stock up in warehouses.
“Looking at the market, many people think it is ‘warming up’, but in reality, the buyers are only buying to stock up in warehouses, while actual purchasing power in the market is decreasing,” said Mr. Do Xuan Lap.
Regarding market trends, Mr. Vu Quang Huy - Chairman of Vietnam Plywood Association - said that demand has increased but is currently being affected by shipping costs. It is forecasted that in the next 3 months, this issue will still have a heavy impact on exports, especially exports to the US, EU, North Africa, India, etc. markets. In addition, cost of raw materials is too high, especially price of rubber wood has increased rapidly, at times increasing by over 1 million VND/m3, causing difficulties for businesses in the wood industry. In 2024, wood industry aims to export 15.2 billion USD, of which wood and wood products are over 14.2 billion USD, an increase of 6% compared to 2023. In order for wood industry to reach the finish line, Mr. Tran Quang Bao said that Forestry Department will continue to promote and introduce Vietnamese wood processing and forestry industry, attract and promote export of wood and forestry products through effective organization of fairs and exhibitions. Continue to coordinate with Trade Defense Department and relevant agencies to update information and have effective solutions to respond to trade lawsuits.
In addition, to prepare legal and quality raw materials for export wood processing industry, Mr. Tran Quang Bao said that Ministry of Agriculture and Rural Development will continue to implement policies to encourage development of large timber, timber with sustainable forest management certification, develop cooperation and link production forest planting with consumption of forest products.
At the same time, pilot issuance of raw material forest planting area codes according to instructions in Decision No.2260/QD/BNN-LN dated July 9, 2024 of Ministry of Agriculture and Rural Development promulgating Document on temporary guidance on issuance and management of raw material forest planting area codes, piloted in the provinces: Bac Giang, Lang Son, Phu Tho, Tuyen Quang, Yen Bai. Then, evaluate on a large scale, aiming to gradually provide wood with legal wood sources to meet requirements of international market, especially the EUDR.
Source: Vitic/ congthuong.vn
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