Vietnamese timber market sees improvement, especially to non-traditional export markets like India and Middle East

Wood used for construction purposes are exported to Middle Eastern countries like UAE

Although Vietnam’s wood industry is still facing many difficulties, wood and wood product exports have shown positive signals with orders coming from key markets such as the US and Europe, and businesses are likely regaining consumers.

This lead to increased demand for imported wood raw material for the manufacture value-added products for export. Imports of roundwood and sawnwood from the EU are expected to increase slightly from now to the end of 2023.

India and Middle East offer new opportunity for Vietnam’s timber exporters. With the sharp fall in exports of wood products to traditional and well-established markets such as the US, China, Japan, South Korea and the EU, India and the Middle East are emerging as new opportunities for Vietnamese exporters.

According to the Vietnam Timber and Forest Products Association (VIFOREST), Vietnam’s wood export orders for the US in the first half of the year fell by around 30% depending on product categories, while those for the EU market also shrank by up to 40%.

India and the Middle East are becoming prospective markets for Vietnamese wood products although revenue remains low with no large and long-term orders. India is not Vietnam’s main timber export market but customs data showed export earnings in the early months of 2023 had already reached US$21m, three times higher than the same period last year.

Vietnam’s main export to India is medium-density fibreboard (MDF) which accounted for 47% of total exports. Similarly, Vietnam’s wood exports to Middle Eastern countries also witnessed strong growth with revenues from the United Arab Emirates (UAE) up by 38% to $11m. The main exports to this market were construction wood, chairs and other wooden items.

But according to enterprise leaders, the tastes in the Indian market are different from that of the European and US markets, as their favoured products are not being manufactured by Vietnam.

For now only the younger consumers are using products similar to western countries. For the Middle East there was an increased demand for construction wood in the early months of the year some were facing difficulties in securing timber from their traditional suppliers due to economic and political uncertainties.

Although their purchases remain limited the Middle East’s rising import of Vietnamese timber is offering new hopes for Vietnamese enterprises amidst the current crisis.

VIFOREST Chairman Do Xuan Lap said the US is still the most important market for Vietnamese timber. To increase the competitive advantage in this market Vietnamese enterprises need to review their strategic products and look into products with high levels of potential with which they have a competitive edge.

For the Indian market wood enterprises need to learn about the demand for MDF and other wood products. Regarding the Middle East they need to conduct thorough surveys of the potential for exports to these markets and the products which are in demand.

Source: ITTO