At a wood pellet processing factory in Thai Nguyen (Photo: VNA) Vietnam, the second largest wood pellet producer in the world, after theUS, recently inked a deal to provide wood pellets for Japan overthree 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 ofVietnamese wood pellets splashed out 195 million USD on purchasing 1.16 millionpellets from Vietnam, up 28.88% in value and 5.65% in volume as compared to thesame time last year.
Shipments to the Republic of Korea (RoK) have also showed signs of growth recently.
Nguyen Thanh Phong, head of the wood pellet branch, said demand for theproducts in the Korean market will increase in the coming months, with theestimated volume of some 100,000 tonnes a month.
Similarly, there will be an increase in the demand for wood pellets in the EUmarket, he said, given the global commitments to reducing emissions andpromoting the use of bioenergy that have created opportunities for wood pelletexports in the remaining months of 2023.
According to the General Department of Vietnam Customs, Vietnam shipped 4.9million wood pellets abroad, and gained 0.79 billion USD in revenue in 2022. Over95% of the exports were destined for Japan and the Republic of Korea, who usedthe pellets as a fuel for electricity generation.
According to the report entitled, “Vietnam’s Production and Export of Wood Pellets Status and Concerns” released by a joint research team from the the Forest Trendsand several Vietnamese timber associations in July, global demand for woodpellets is expected to continue to dramatically increase, reaching 36 milliontonnes in the next decade, up from 14 million tonnes in 2017.
Japan consumes around 8 million tonnes of pellets a year, 50-60% of which aremade from wood. Pellet demand in the East Asian country is forecast to rise to20 million tonnes by 2030, with 13-15 million tonnes made from compressed wood fiber.
This is a golden chance for Vietnamese wood pellet producers and exporters,especially those with stable source of materials and sustainable forestmanagement certificates.
However, high prices of inputs due to shortage of supply have caused a lot ofdifficulties for wood pellets producers recently, the research team said,adding enterprises are expecting a recovery in furniture orders as it will helpease pressure on prices of raw materials for wood pellets.
VIFOREST President Do Xuan Lap said the wood pellet industry is developingstrongly, bringing significant value to the forestry value chain, elaborating thatwood pellets ranked 4th in terms of export value of eight exportitems and forest products, just behind interior and exterior furniture, woodmaterials and wood chips.
The pellets are likely to become one of Vietnam’s key export agro-forestryproducts with an estimated export turnover of 1 billion USD in 2023, he added.
Along with exports, experts said the industryhas opportunities to thrive right in the domestic market as the Governmentis striving to carry out commitments to cutting greenhouse gas emissions andusing clean energy, including the swap of coal for wood fuel.
Under the National Power Development Plan VIII, Vietnam targets that by 2050,coal will have no longer been used for power generation but biomass andammoniac instead. Therefore, there is a strong possibility that domestic demandfor wood pellets will increase sharply in the coming time.
In this context, experts suggested competent associations and enterprisesshould have sound forecasts on domestic consumption and global demand, as wellas the supply of materials in the near future./.
VNA
