Vietnam sees improvement in wood products export to the US

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Wood product exports to the US are warming up although sales over the past few months were down compared to the same period last year.

Vietnam’s Ministry of Industry and Trade’s Agency for Foreign Trade Information Center reported that the US remained the main market for Vietnamese wood. In H1 of 2023 exports reached US$3.3bn, accounting for 54% of the total but down 33% over the same period in 2022.

The driver of demand growth in the US market is low inventories and increased construction activity. Furthermore, the market becomes more active as the holiday shopping season approaches.

Low availability of housing combined with the numerous incentives offered by construction companies has increased buyer interest in new homes which has lifted demand for imported wood and wood products particularly wooden furniture.

The US economy is showing signs of revival with consumer demand increasing. The US government and its corporations continue to pay attention to Vietnam and pledge robust business collaboration.

As a result of the positive rebound, big US retail chains have begun to resume orders with Vietnam.

According to Tran Lam Son, Deputy General Director of Thien Minh Import-Export, the US market is exhibiting signs of improvement. Thien Minh specialises in plantation wood as well as bamboo and rattan.

Two years ago the Japanese market accounted for approximately 50-60% of this enterprise’s overall export earnings while the US accounted for approximately 40%. However, the US market currently accounts for approximately 50-60% of the company’s overall export revenue.

Son said that, while shipments to the US were still down from the previous year, orders were up because clients were gearing up for the holiday shopping season.

He noted that during peak times, shipping costs to the US were more than $10,000 per container but that cost has fallen which allowed more competitive pricing.

According to a representative of Bao Hung, a manufacturer of wooden furniture, shipments to Japan accounted for 60% of its total export revenue two years ago, while the US accounted for 40%. Now, 60-70% of exports are to the US. The US market gained somewhat due to end-of-year imports while the Japanese market remained stagnant.

Source: ITTO