Vietnam exports recovering, but bottlenecks remain

The origin of wood raw material are strict when importing into the US or EU

According to data from the Vietnam’s Ministry of Agriculture and Rural Development, Department of Forestry, in the first two months of 2024, the export value of wood and forest products is estimated to have reached US$2.68bn, an increase of 47% over the same period last year.

The value of imports of wood and wood products in the first two months of this year is estimated at US$355m, up 31% over the same period in 2023. The wood product trade surplus in the first two months of the year is estimated at US$2.465bn.

Despite the positive trend in exports the timber industry is facing many challenges. Trieu Van Luc, Deputy Director of the Forestry Department said the impact of the conflict between Russia-Ukraine and between Israel and Hamas and shipping problems in the Red Sea is complex and unpredictable.

In addition, global shows signs of slowing and consumers continue to tighten spending on non-essential products including furniture and wood products.

Adding to the challenges of the timber industries is the need to address the requirements in importing countries to ensure legality and ensure no forest degradation or deforestation.

A representative of the timber industry shared experiences on the difficulties and obstacles in importing wood raw material, processing and exporting wood products. Do Xuan Lap, chairman of Vietnam Wood and Forest Products Association (VIFOREST), said that in the US regulations on the origin of wood raw material are strict.

He said he was aware the US Department of Commerce is amending a number of regulations on anti-dumping and anti-subsidy investigations including ways to identify previously unrecorded subsidies such as export insurance, debt cancellation and tax advantages.

For the EU market, the EUDR will come into force this year said Do Xuan Lap and action is needed as Vietnam’s regulations on determining the origin of wood are currently not specific.

Another issue for the Vietnamese timber exporters is the decision by India to apply new standards and there is insufficient time for manufacturers to comply.

Source: ITTO