Vietnam: Wood export revenue up in 2016, but prospects cloudy

Vietnam is estimated to gain one percent YoY to US$7.3 billion from wood and wood-based products exports this year, according to the Ministry of Agriculture and Rural Development’s General Department of Forestry. 

The export value of forest products gained 5 to 10 percent in 2016 while the value of wood and wooden products rose by 1 percent against last year, said Nguyen Ba Ngai, deputy director of the General Department of Forestry.

The slight growth was due to the fall in export value of wood chips compared with last year, or 61% of the export value of wooden chips in 2015, he said. Wood chips also fell in export volume due to fall in demand from China. Competition with Thailand, Australia and some African nations was also a factor.

This year, Vietnam promoted diversification of the export market to increase market shares on the world market, Ngai said. Especially, Vietnam has completed negotiations on the Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (VPA/FLEGT) between Vietnam and the European Union, opening many opportunities on market development in the future.


Lack of material

Vietnam’s wood processing industry will continue to develop in the coming years. However material shortage will likely surface as an issue in the near future as many international companies have carted off large volumes of wood in the south, leaving little for local players, Bui Nhu Viet, vice chairman of the Binh Duong Wood Association, said.

This has bumped up wood prices, from VND2-3 million per cubic metre to VND5 million at present. Fierce competition for rubber wood has also seen prices going up by nearly 25 percent, said Do Xuan Lap, chairman of the Binh Đinh Wood Association.

“This is putting pressure on furniture manufacturing enterprises in Ho Chi Minh City, Binh Duong, Dong Nai and Binh Dinh provinces,” he said.

While the Vietnamese government is working on the issue, it has yet to limit exports of material for wood processing. The private sector has proposed increasing export tariffs for timber and sawn timber to 20 percent.

Duong Phuong Thao, deputy head of the Import and Export Department from the Ministry of Industry and Trade, said that the government will help create favourable conditions for local enterprises to grow plantations and import wood.


Source: Vietnam Net