Vietnam, as one of the world's largest exporters of wood, wood products and furniture, experienced a period of sluggishness during the epidemic, but after the lockdown measures eased, its wood and wood products trade can be said to be among the world's leading players.
The Ministry of Forestry of Vietnam, which was originally full of confidence in this year's timber exports, was forced to cancel a large number of orders due to inflation in Europe and the United States, and its timber export trade ushered in another situation.
According to Vietnam Customs data, in just two months from August to September, Vietnam's wood products exports fell sharply by 21%, and total shipments fell by 14.6%.
Reasons for the decline in exports of wood products
Regarding the decline in Vietnam's wood products exports, industry sources said that it may be related to the preliminary affirmative ruling announced by the U.S. Department of Commerce on circumventing investigations of hardwood plywood manufactured with Chinese core materials and assembled in Vietnam. The U.S. side said that an investigation found that various types of hardwood plywood in Vietnam contain Chinese materials that should be subject to anti-dumping and countervailing duties, which has resulted in a decrease in U.S. imports of wood products from Vietnam.
On the other hand, Europe and other regions are one of Vietnam's most important receiving markets for wood products. The European side is concerned that the sanctioned goods from Russia may flow into the European market through Vietnam, so they are wary of importing Vietnamese wood products.
In addition, although Vietnam is a major exporter of wood and wood products, in fact, as Vietnam's domestic processing industry becomes more mature and steadily developing, it needs to import a large amount of raw materials such as logs and sawn timber from abroad every year. However, in recent years, in the context of labor shortages caused by the spread of the epidemic, crisis in the supply chain, and rising energy costs caused by the Russia-Ukraine incident, the cost of raw materials imported by Vietnam has also risen.
Faced with increasing production costs, Vietnam's wood products have also had to raise export prices. In addition, since many countries require the raw materials of wood products to be certified by FSC, although the global timber market price is in a downward trend, the price of FSC-certified logs imported from the EU is still at a high level due to the cancellation of the FSC certification of Russian timber. , Many Vietnamese wood processors said that most of the profits have been subtracted from raw materials.
As a result, Vietnam faces two major problems: reduced exports and high raw material costs. And with the poor performance of the global wood market this year, the market demand is still slowly recovering, and it is difficult for Vietnam's wood product exports to increase the export volume for a while. Therefore, in the fourth quarter of this year, Vietnam's wood products exports may still maintain a slowing trend.