Vietnam’s wood and wood products export is forecast to reach US$8 Mn in 2017, a 17 per cent year-on-year increase and surpassing its target of US$7.5 Mn set earlier this year.
The first nine months saw impressive growth, boosting the industry’s prospects, said Nguyen Ton Quyen, Vice Chairman and General Secretary of Vietnam Timber and Forest Product Association (VIFORES).
From January to September, the sector earned US$5.9 Bn in export revenue, up 11 per cent compared to the same period last year. The wood export turnover reached some US$700 million a month. Particleboard, fibre board, MDF and wood pellets achieved the highest growth.
As the last three months of the year are generally considered peak trading season, the industry’s target of US$8 billion is deemed attainable.
Wood exports grew in most key markets, such as the US, Japan, the EU, China and South Korea. The value of exports to these five markets makes up nearly 90 per cent of the total.
Furthermore, Vietnam initiated the Viet Nam-EU Voluntary Partnership Agreement (VPA) on the EU Forest Law Enforcement, Governance and Trade (FLEGT) in May 2017. Implementation of this agreement in Vietnam will ensure all wood products on the agreed list are legal. The document could create fundamental changes for Vietnam’s wood processing sector, as well as domestic and export markets, including nations supplying wood material to Vietnam and those buying wood and timber products from Vietnam, Nguyen added.
However, the country is facing several challenges, including the short supply of raw wood. Vietnam imports wood material worth US$1.7-1.8 Bn annually, equivalent to about 20 – 30 per cent of the export turnover.
To Xuan Phuoc, an expert from Forest Trends, said Vietnam’s export turnover of wooden products has been stable since 2015. However, the biggest challenge for wood companies to expand was competition in raw wood purchase.
China’s ban on natural forest logging, and restrictions imposed by Vietnam and other countries on the trade, exploitation and export of raw wood have limited supply globally.
He also added that some of Vietnam’s major wood and wood product importers such as the US, Australia and the EU demand to know the legal origin of wood. This means wood must come certified sustainable sources.
South Korea and Japan are also planning to tighten the management of imported wood products, he said, adding that this would directly impact Vietnam’s exports to those markets. By the end of this year, the South Korean government will require importers to declare the legality and origin of wood and wood products coming into the country. Japan will implement the same in March 2018.