Difficult times ahead for Vietnam’s rubber wood supply

By Nam Anh, GoViet

Vietnam’s decision to shut down natural forest harvest and the sustained demand for rubber wood has created a sharp increase in timber prices and even larger demand for rubber wood. The problem of scarcity is further exacerbated by China’s harvest ban, which has also seen Chinese traders buying up large amounts of wood.

Since the beginning of 2017, rubber wood prices have increased by 30 – 40 per cent, creating issues for the furniture export industry. According to experts, timber resources will continue to be scarce in the long term. This is especially so as rubber plantations are not expected to give up their trees during the period 2020-2025.

According to Le Minh Duc, director of Truong Phat Wood Joint Stock Company, timber prices have gone up due to increasing competition as well. Most woodworking enterprises must exploit the full value of the material.

In the past, Malaysia used to provide a large amount of rubber wood for the Chinese market but since early 2017, Malaysia has also banned exports. As a result, Vietnam may be one of the markets where Chinese traders have been looking to buy timber materials.

Poor management

The rubber wood market is fairly unstable as buying trees from plantations is not regulated.

When a trader asks to purchase rubber wood, they usually buy the whole orchard. Both parties agree on the price, sometimes up to VND 1 million per tree. There is no need for documents, making the control of wood resources very difficult for the authorities, creating even more instability for the control

Nguyen Duc Thuyen, director of Phu Thinh Investment Construction Rubber Joint Stock, suggests that to avoid market turbulence, associations, private enterprises and the government should communicate and collaborate to reduce market risks.