Vietnam's export value of timber and wood products in June fell by 4.9% annually to 1.5 billion USD. (Photo: congthuong.vn) According to the General Department of Customs, Vietnam's exportvalue of timber and wood products in June fell by 4.9% on-year to 1.5 billionUSD. Timber exports in June were estimated at more than 1.03 billion USD, down18.1%.
In the first six months, the export value of timber and woodproducts surged by 2.8% on-year to 8.5 billion USD. But the export value ofwood products plunged by 4.6% on-year to 6 billion USD.
Wooden furniture was the key export item in the structure ofexport timber and wood products in the first five months of this year. However,the export value decreased due to slowing global demand
The impact of the COVID-19 pandemic, the “zero COVID policy” inChina and the high input costs due to the Russia-Ukraine conflict caused manycountries to face high inflation, so consumers must tighten their spending todecrease demand for non-essential goods like wood products.
Those factors made Vietnam's export value of timber and woodproducts plunge in the first half of this year.
Nguyen Liem, Chairman of the Binh Duong Furniture Association (BIFA)and general director of Lam Viet Joint Stock Company, said that risinginflation has made consumers in export markets such as the US and EU spend onessential items first. So, his company has faced reducing orders from somepartners.
In addition, the lower wood export turnover in the first half wasalso due to very high logistics costs. Even the value of wooden products in thecontainers exported to the US market is much lower than the shipping cost. Forexample, in some US ports, the freight of one container is now around 20,000USD. Meanwhile, the value of wood products in this container is about 13,000-15,000USD.
High shipping costs lead to a tendency to move orders toneighbouring countries like Mexico to take advantage of geographical distance.
Nguyen Chanh Phuong, Vice Chairman of the HCM City Fine Arts andWoodworking Association (HAWA), said the US market accounts for 60% of theexport value of Vietnam's timber and wood products. Vietnam's wooden furnitureexports to the US market are mainly cheap products.
High US inflation has caused low- and middle-income groups totighten their spending, creating a significant impact on Vietnam's wood productexports, he said.
The local wood industry's enterprises have begun to have signs ofa lack of orders from the US market, while some other big markets, such as theEU and the Republic of Korea, have also started showing difficulties due toinflation.
The lower export turnover of timber and wood products in the firsthalf of 2022 has worried the wood industry, particularly regarding the exportgrowth target this year.
Nguyen Liem said that the wood industry was now one of the goodsitems gaining high export growth. However, the export growth rate has beenlower than the figures in the previous years.
This year's timber and wood product export turnover growth isforecasted only to reach 5-7%. It will be challenging to get 19% growth in2021, Liem said.
That situation is partly due to the 20 to 60% higher price ofinput materials over the same period last year. This reduces enterprisecompetitiveness even with technical improvements to increase labourproductivity, he said.
He added that the room for export growth was not large unlessthere was a breakthrough such as digitisation, automation, or more use ofdomestic wood.
Experts are currently cautious in forecasting the growth of exporttimber and wood products this year.
In the context of high inflation that has not shown any signs ofcooling globally, businesses are also reviewing orders to achieve the mostefficiency in production and business and keep their client.
In addition, Do Xuan Lap, Chairman of the Vietnam Timber andForest Products Association, said a problem for the wood industry today wasthat Vietnam needed to develop a large, high-quality domestic wood raw materialsource to maintain its competitive advantage.
Nguyen Quoc Tri, Director of the General Department of Forestry,said the department would coordinate with associations in the wood industry tosolve the problem in raw materials./.
VNA
