“Exports of wood and wood products to the United States decreased by 4.9% due to the tightening of credit policy to control inflation, leading to a decrease in consumer demand. Exports to Japan, Korea, and China markets strong growth, over 13%, due to increased exports of wood chips and pellets”.
Export turnover of wood and forest products in July 2022 is estimated at 1.41 billion USD, down 5.5% compared to June 2022 and down 1.6% over the same period in 2021. Up to 44% of enterprises The wood industry thinks that revenue will decrease by about 40% in the whole year of 2022…
Mr. Bui Chinh Nghia, Deputy Director of the General Department of Forestry.
“Currently, due to the increased demand for woodchips and pellets production, leading to a high purchase price of over 30%, forest owners tend to cut young forests (3-4 years old plantations), leading to the risk of shortage of forest products. shortage of wood materials for processing all kinds of wood products”- Mr. Nghia stated the situation.
Furniture manufacturing enterprises are facing difficulties.
The reason for this decline is mainly due to the price of raw materials for production and the sharp increase in transportation costs; countries tighten credit policies because inflation tends to increase, leading to a sharp decrease in consumer demand… The above issues were raised at the Wood Industry Briefing Conference in the third quarter of 2022, organized by the Timber and Forestry Association. Vietnam Products in collaboration with the General Department of Forestry held on July 28.
EXPORTS DECREASE STRONGLY IN US MARKET
Mr. Do Xuan Lap, Chairman of the Association of Timber and Forestry Products, said that the main export markets of Vietnam’s wood such as the United States, Europe, and the UK are experiencing inflation and experiencing a huge drop in demand. This is currently having a direct negative impact on the production and business activities of enterprises in the industry today, showing us a very bleak picture of the market.
Mr. Bui Chinh Nghia, Deputy Director of the General Department of Forestry, said that the export value of wood and forest products in July was estimated at 1.41 billion USD, down 5.5% compared to June 2022 and down 1.6. % over the same period in 2021.
In the 7 months of 2022, the export of wood and forest products is estimated at 10.42 billion USD, up 1.3% over the same period in 2021. In which, wood and wood products reach 9.72 billion USD, up 1. ,2%; export of non-timber forest products reached USD 0.7 billion, up 2.6%.
In wood block and wood products: wood chips 1.4 billion USD, up 29.8%; wood pellets 0.45 billion USD, up 78.5%; boards of all kinds US$0.91 billion, up 22.1%; wood products 6.97 billion USD, down 6.9%.
About the market in 7 months, timber and forest products were exported to 110 countries and territories. In which, the US reached over US$ 5.84 billion, down 4.9% over the same period in 2021. Specifically, wood and wood products reached US$ 5.58 billion, down 5.1% (boards of all kinds 347 million USD). USD, up 29.8%, of which: plywood 314 million USD, up 29.2%; wood products 5.02 billion USD, down 10.6%); non-timber forest products $0.25 billion, down 0.6 percent.
Exports to Japan reached $1.04 billion, up 19.4% over the same period in 2021. Of which: wood and wood products $999 million, up 20.4% (wood chips $371 million, up 31 percent) .7%; wood pellets 177 million USD, up 66.5; all kinds of boards 58 million USD, up 14.5%; wood products 392 million USD, up 0.4 %); non-timber forest products $ 36 million, down 2%.
Exports to China reached 1.161 billion USD, up 23.8% over the same period in 2021. In which, wood and wood products reached 1.15 billion USD, up 22.9% (wood chips 1.01 USD, up 36.7%; sawn timber 12 million USD, down 44%; all kinds of boards 89 million USD, down 21.3%; wood products 33 million USD, down 43.3%); non-timber forest products USD 15 million, up 164.2 %.
Export to the EU is 726 million USD, up 0.8% over the same period in 2021. Of which, wood and wood products are 549 million USD, down 2.0%; non-timber forest products USD 177 million, up 10.6%.
Exports to South Korea reached $623 million, up 13.0% over the same period in 2021. In which: wood and wood products $604 million, up 13.1% (wood chips $44 million, up 10.8%; pellets); wood $ 257 million, up 71.8%; boards of all kinds $ 139 million, up 7.3%, of which: plywood reached $ 156 million, down 0.9%; wood products $ 122 million, down 32, 4%); non-timber forest products $ 19 million, up 7.9%.
Some items with high export growth, such as wood chips, increased by 29.8%; tablets increased by 78% due to high world demand; Export prices of these items also increased, reaching an average of 170 USD/ton, up more than 30% over the same period in 2021.
WOODEN INDUSTRY ENTERPRISE IS VERY DIFFERENT
Regarding the source of the same material from domestically planted forest wood, Mr. Bui Chinh Nghia raised the problem: “Currently, due to the increased demand for woodchips and pellets production, leading to high purchasing prices, over 30%, the owners forests tend to cut young forests (3-4 years old plantations), leading to the risk of shortage of wood materials for processing all kinds of wood products.
The research team of Timber Associations and Forest Trends has just conducted a quick survey on the increase and decrease in export revenue of wood industry enterprises in the second quarter of 2022. Presenting the survey results, Dr. To Xuan Phuc, an expert from Forest Trends, said that the research team had conducted a quick survey at 52 furniture processing and export enterprises.
Of the 45 enterprises currently exporting to the US, 33 enterprises said that their export revenue in the second quarter had decreased, with an average decrease of nearly 39.6% compared to the first months of the year. Only 10 enterprises reported an increase in revenue compared to the previous months, however, the increase was very small, an average increase of 11%; the remaining 2 businesses did not respond.
The trend is similar for the EU market, out of 38 enterprises participating in this market, 24 enterprises reported a decrease in revenue in the second quarter, with an average decrease of over 41% compared to the previous months. Only 4 enterprises reported an increase in revenue, an average increase of 14%; the remaining 11 businesses did not respond.
In the UK market, out of 25 enterprises participating in this market, 17 enterprises reported a decrease in revenue, at over 41%; only 4 enterprises saw an increase in export revenue, with an average increase of 14%; the remaining 6 businesses did not respond.
There are 28 enterprises exporting wooden furniture to the markets of Southeast Asia, Australia, Newzealn. In which, there are 16 enterprises with a decrease in revenue with an average decrease of 22.15%, there are 4 enterprises with an increase in revenue with an average increase of 64.8%; and 8 businesses did not respond.
“Enterprises are currently facing many difficulties in terms of capital, labor costs and input materials. Many businesses are also taking mitigation measures, including reducing production scale, converting products, changing markets and a number of other measures,” said To Xuan Phuc.
“Around 71% of businesses said that orders from now until the end of the year will continue to decrease. According to enterprises’ assessment, with the current market situation, 44% of businesses believe that their revenue source. will decrease by about 40% for the whole of 2022”,
Dr. To Xuan Phuc, Expert of Forest Trends.
The Vietnam Timber and Forest Products Association recommends banks to have preferential policies for wood industry enterprises to overcome the current difficult period.
Specifically, propose debt extension, interest rate reduction; extension of due loans; inventory loans, unsecured loans; access to preferential capital sources. The association proposed the Ministry of Finance to have policies on taxes and fees to support wood industry enterprises: reducing and delaying collection of corporate income tax; land rent reduction; VAT refund fastest to pay capital for businesses.
The General Department of Forestry also proposed to wood industry associations, so it is recommended to businesses that need to update market information regularly (assessments, seminars, reports…). Proposing enterprises to develop e-commerce, digital transformation, improve technology; links to reduce costs; Finding new customers, expanding markets…