According to the recent announcement by the General Statistics Office of Vietnam, Vietnam exported timber and wood products worth about US$1.1 billion in January, a year-on-year decrease of 29.8%.
Do Xuan Lap, chairman of the Vietnam Timber and Forest Products Association, said the decrease in exports was mainly due to a shortage of orders. It is understood that during the Spring Festival this year, Vietnamese factories are facing extended shutdowns, and some companies have a holiday of up to one month. Currently, most producers choose to "hibernate" to wait for the market to recover. How long this "hibernation" will last depends on the inventories and financial situation of producers.
Vietnam’s Ministry of Industry and Trade recently issued a report stating that due to tariffs and the overall market downturn, it is recommended that companies carefully arrange their production plans for 2023. Economic slowdown and high inflation in many major import markets, such as the US, EU and Japan, have directly affected Vietnam's production and exports.
Local media VnEconomy quoted Lap as saying that global inflation had a severe negative impact on demand and orders in Vietnam's timber industry late last year and early this year.
Last year, Vietnam reaped more than US$16 billion from exports of timber and wood products, 3.8 percent more than expected, the chairman said. Statistics from the General Administration of Customs of Vietnam show that Vietnam's timber and wood products exports will reach US$16.9 billion in 2022, a year-on-year increase of 6.7%.
This year, Vietnam has set an export target of lumber and wood products at a record high of US$18 billion, and will achieve an export growth of 7% to 9% for the whole year.
Do Xuan Lap said that 2022 will be one of the most difficult years in the industry's history. Industry companies lack funds and raw materials. Coupled with rising costs, the wood processing and export sectors are facing difficulties. Many exporters have also had to lay off staff and cut production due to limited orders.
To achieve the export target for 2023, the industry will continue to focus on improving the competitiveness of Vietnam's local manufacturing industry by reducing timber imports, using advanced technologies to increase factory productivity, accelerating digital transformation to reduce production costs, and participating in international trade fairs to promote trading.