Wood exports set US$8 bil export turnover target

The association forecasts that wood exports to major markets such as the US and China have posted the highest growth rate over the past few years but this will prove only a temporary boom with these markets likely to see a downward trend and the focus shifting to exporting timber to the EU market.

Nguyen Ton Quyen, Vifores General Secretary says that from the start of the year to late November, export turnover soared an impressive 10.5% to nearly US$7 billion when compared to the same period last year.  The wood sector has witnessed strong growth in the 11-month period surpassing last year’s 1.1% growth rate.

The US, China, Japan, the EU and the Republic of Korea remain the largest consumers of Vietnamese wood and wooden products, accounting for nearly 90% of the total export turnover. In particular, the US has the biggest market share of Vietnamese wood at 42.7%, trailed by China at 14.1% and Japan at 13.7%. Wood exports have shown a drastic upturn in such markets as the US (up 18.8%), the Republic of Korea (up 14.2%) and Canada (up 13.4%).

The increase is attributable to the high export growth of artificial wood board, particle board, melamine-faced chipboard (MDF) and wood pellet while exports of such products were on a downturn trajectory in previous years. In addition, new market expansion will provide solid foundation for the wood sector to bolster export growth in the coming years.

With an average growth rate of 11% per month and the peak season in the rest of the year for wood exports, the turnover of US$7.8 billion for the whole year is within reach and is likely to touch US$8 billion.

For the EU market, Mr Quyen says that recently, wood trade between Vietnam and the EU has made up for around 12%-15% of the country’s total export turnover with average value of US$650-US$700 million per year. The EU-Vietnam Free Trade Agreement (EVFTA) will officially come into force next year and bring tariffs on wood products to zero %. The trade deal is expected to elevate total export turnover to approximately US$1 billion.

Some experts forecast that wood exports to the US market will experience a fall in the coming years. Mr To Xuan Phuc a policy analysis expert from the US-based Forest Trends, says Vietnam’s timber exports to the US, currently amounting to US$2.7 billion might be affected by the US’s policy of bringing jobs back to the US.

Owing to the rapid growth rate, the wood sector has faced a number of challenges including a scarcity of raw timber and fierce competition between foreign and domestic material suppliers.