2 reasons why wood and wood product exports are concerned about not reaching the 'finish line' as expected

The unpredictable market and the impact of super typhoon Yagi may be the reason why wood and forestry product exports did not reach the expected target of 17.5 billion USD.

The United States leads the export market

Import and Export Department ( Ministry of Industry and Trade ) cited statistics from the General Department of Customs, saying that in September 2024, the value of wood export and Vietnam's wood products reached 1.25 billion USD, down 17.1% compared to August 2024, but up 10.9% compared to September 2023. Of which, the export value of wood products reached 902.5 million USD, down 12.5% compared to August 2024, but up 19.8% compared to September 2023.

2 reasons why wood and wood product exports are concerned that they will not reach the target in 2024 as expected

In the first 9 months of 2024, the export value of wood and wood products reached 11.7 billion USD, an increase of 21.5% over the same period in 2023. Of which, the export value of wood products reached 8.04 billion USD, an increase of 23.7% over the same period in 2023.

Regarding export markets, export value to major markets maintained positive growth momentum in the first 9 months of 2024, with only exports to the Korean market decreasing slightly.

In particular, the US market led in terms of export value in the first 9 months of 2024, reaching 6.5 billion USD, up 25.9% over the same period in 2023; followed by the Chinese market reaching 1.5 billion USD, up 25.4%; Japan reaching 1.26 billion USD, up 0.1%; South Korea reaching 574.6 million USD, down 1.5%...

Assessing the export picture in the first 9 months of 2024, Mr. Ngo Sy Hoai - Vice President and General Secretary of the Vietnam Timber and Forestry Association (VIFORES) - said that the current double-digit growth is mainly due to the fact that Vietnam's wood exports in 2023 decreased sharply (down 15.9%) after many years of continuous growth. Compared to 2022, when the export turnover of wood and wood products reached 16.1 billion USD, the growth in the first 9 months of this year should only be considered a recovery after hitting rock bottom. However, it is worth noting that the export turnover of the wood industry has recovered faster than expected and is much higher than many other industries.

Commenting on the wood export situation in the last months of the year, Mr. Ngo Sy Hoai said that with the growth momentum of the first 9 months of 2024, the export of wood and forestry products for the whole year could be positive. Because normally, in the last quarter of the year, there will be a peak shopping season for consumers in many countries, so the export of wood and wood products will accelerate to the finish line. If there are no uncertainties, the export turnover of wood, wood products and non-wood forest products for the whole year of 2024 could reach over 16 billion USD.

However, according to the Import-Export Department, the export of wood and wood products from now until the end of the year will face many difficulties, because the world situation continues to have complex and unpredictable fluctuations; geopolitical conflicts, the impact of high sea freight rates leading to an increase in the price of imported raw wood, causing the cost of output products to increase. This will affect the growth momentum of the wood industry and it is possible that the export value of wood and wood products will only complete 90% to 95% of the plan set for 2024.

Mr. Nguyen Liem - Chairman of the Board of Directors of Lam Viet Joint Stock Company - Chairman of Binh Duong Wood Association (Bifa) - commented that the general situation of wood industry enterprises in Binh Duong is similar or slightly increased compared to 2023 but not as much as in 2022 when wood and wood product exports reached a record of over 16 billion USD.

In 2023, the wood industry set an export target of 17.5 billion USD but failed to achieve it. In 2024, this target was set again. However, the order situation for the whole year of 2024 may only reach about 70 - 80% of 2022. Notably, the actual recovery is also uneven among enterprises. Accordingly, FDI enterprises are somewhat better, the domestic group has companies operating smoothly but there are also units facing difficulties.

Notably, Typhoon Yagi damaged 170,000 hectares of planted forests in the northern provinces. Many processing factories in the area were also severely damaged. The Forestry Department (Ministry of Agriculture and Rural Development) forecasts that wood production activities will face many difficulties in the last quarter of the year.

Forced to change to adapt

USA Currently, Vietnam is the largest importer of wood and wood products. Mr. Nguyen Chanh Phuong - Vice President of the Handicraft and Wood Processing Association of Ho Chi Minh City (Hawa) - said that the US market - which accounts for more than half of the export turnover - is still unpredictable, especially when it comes to the US election next month. In addition, strikes on the East Coast could increase shipping costs, causing customers to pay later.

Sharing the same view on this issue, Mr. Nguyen Liem assessed that in the past 9 months, the US market spent 5.9 billion USD buying "Made in Vietnam" wooden furniture, an increase of nearly 25% over the same period in 2023. However, medium and cheap quality products are consumed better.

To expand their output, some businesses are proactively adapting to new trends. Mr. Nguyen Liem said that currently, some businesses in Binh Duong have started to design their own products to offer to customers. Others have proactively retailed through other channels. e-commerce instead of just wholesale.

Meanwhile, with the increasingly strict demands of the import market, Mr. Ngo Sy Hoai said that businesses need to increase the competitiveness of their products and proactively promote trade, improve corporate governance, innovate technology, and reduce production costs. In particular, focus on enhancing capacity. trade defense Because the frequency of anti-dumping, anti-subsidy and anti-tax evasion lawsuits and investigations may increase, businesses also need to take effective measures to reduce emissions and move towards zero emissions.

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