In the first 7 months of 2024, wood and product exports earned 8.78 billion USD, however, this industry faces double difficulties in achieving the target of more than 15 billion USD.
Wood and wood products exports record double-digit growth
According to the report of According to the Ministry of Agriculture and Rural Development , the 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 the contribution of most commodity 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 the Department of Forestry (Ministry of Agriculture and Rural Development) - said that since the beginning of the year, the wood and forestry processing industry has been one of the bright spots in exports, with double-digit export growth.
Notably, exports of some products and key markets in the first 6 months of 2024 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%, the EU reached 281 million USD, up 29.6%.
In the general picture of wood and wood products exports, Trade Defense Department ( Ministry of Industry and Trade ) has officially announced the final conclusion of the US Department of Commerce (DOC) in the investigation of product scope and anti-circumvention of wooden cabinets imported from Vietnam. Notably, regarding the anti-circumvention investigation, the Department of Trade Defense said that DOC has canceled the entire anti-dumping/anti-subsidy tax evasion investigation of wooden cabinets imported from Vietnam. This will help Vietnamese wooden cabinets to have a wide open door in the US market from now until the end of the year.
Market trends are containing unsustainable elements.
Although wood and forestry product exports in the first 7 months of 2024 achieved quite high results, in order to achieve the export target of 15.2 billion USD, in the last 6 months of 2024, the wood and forestry product processing industry encountered many difficulties.
Accordingly, the world situation continues to fluctuate in a complex and unpredictable manner, with increasing risk and uncertainty, which may cause the 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.
As in the EU, this market has issued a regulation on deforestation reduction (EUDR) to replace the EU Timber Regulation (EUTR), which, in addition to the legality requirement, also adds a regulation on no deforestation or forest degradation after December 31, 2020. This regulation will be implemented from December 30, 2024, which is a huge pressure on processing enterprises. wood export and luxury wood products EU market in preparing to fully meet the requirements of EUDR, especially the requirements on geographical indications while the EU has not yet had specific instructions, 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 to apply 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 the Vietnam Timber and Forest Products Association - said that currently, the increase in transportation costs has caused the price of input wood materials to increase, with some types of wood having an import price increase of 40% compared to last year. This affects the cost of output products, while foreign importers are demanding a reduction in product costs.
Mr. Do Xuan Lap said that the market trend is containing unsustainable factors. As with kitchen cabinets, the general market trend of this item is stagnant, there are times when it increases slightly but not significantly. The reason for the market increase is said to be geopolitical conflicts causing costs. logistics The increase pushed up the price of goods, so many importers decided 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, while the actual purchasing power in the market is decreasing.” Mr. Do Xuan Lap said.
Regarding market trends, Mr. Vu Quang Huy - Chairman of the 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. In addition, the cost of raw materials is increasing too much, especially the 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, the 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. To help the wood industry reach the finish line, Mr. Tran Quang Bao said that the Department of Forestry will continue to promote and introduce the Vietnamese wood processing and forestry industry, attract and promote wood and forestry exports through the effective organization of fairs and exhibitions. Continue to coordinate with the Department of Trade Defense and relevant agencies to update information and have effective solutions to respond to trade lawsuits.
Besides, to prepare legal and quality raw materials for the wood processing export industry, Mr. Tran Quang Bao said, Ministry of Agriculture and Rural Development will continue to implement policies to encourage the development of large timber, timber with sustainable forest management certification, develop cooperation, and link production forest planting with the consumption of forest products.
At the same time, pilot the issuance of raw material forest growing area codes according to the instructions in Decision No. 2260/QD/BNN-LN dated July 9, 2024 of the Ministry of Agriculture and Rural Development promulgating the Document on Temporary Guidance on Issuing and Managing Raw Material Forest Growing Area Codes to be piloted in the provinces of Bac Giang, Lang Son, Phu Tho, Tuyen Quang, Yen Bai. Then, evaluate and replicate on a large scale, aiming to gradually provide wood with legal wood sources to meet the requirements of the international market, especially EUDR.
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