Vietnam’s exports of wood and timber products is forecast to reach US$8 billion in 2017, representing a 17% y-o-y increase and surpassing the target of $7-7.5 billion set earlier this year.
Nguyen Ton Quyen, vice chairman and General Secretary of Viet Nam Timber and Forest Product Association (VIFORES), said the impressive growth rate in the first nine months boosts prospects of the wood sector achieving its target.
According to Vietnam Net, the sector earned $5.9 billion in export revenue from January to September, increasing 11 per cent from the same period last year. The wood export turnover reached some $700 million a month
Particle boards, artificial wood boards, melamine-faced chipboards (MDF) and wood pellets were the most exported wood products from Vietnam, until now.
The $8 billion industry target might be achieved by the end of 2017, as the last three months of the year are generally the peak season for wood and wood product exports. Wood exports grew in most traditional and key markets, such as the US, Japan, the EU, China and South Korea. The value of exports to the five markets makes up nearly 90 per cent of the total, said Quyen.
In May 2017, after a six-year negotiation process, Vietnam initiated the Vietnam-EU Voluntary Partnership Agreement (VPA) on the EU Forest Law Enforcement, Governance and Trade (FLEGT).
As reported by Vietnam Net, Quyen said that the implementation of this agreement in Vietnam will ensure all wood products on the agreed list are legal. The document could create fundamental changes for Vietnam’s wood processing sector, as well as domestic and export markets, including nations supplying wood material to Vietnam and those buying wood and timber products from Vietnam.
Yet, the country is now facing some challenges, as the short supply of raw wood. Vietnam imports $1.7-$1.8 billion worth of wood material, which is equivalent to about 20-30% of the export turnover.
Xuan Phuc, an expert from Forest Trends, said Vietnam’s export turnover of wooden products has been stable since 2015. However, Phuc said, the biggest challenge for the expansion of the wood sector was competition in raw wood purchase. China’s ban on natural forest logging, and restrictions imposed by Vietnam and other countries on the trade, exploitation and export of raw wood have limited supply globally.
He added that some of Vietnam’s major wood and wood product importers such as the US, Australia and the EU demand to know the legal origin of wood. This means wood must come from forests grown under sustainable forest management standards of the Forest Stewardship Council (FSC) and must be imported from non-risk sources, Vietnam Net reported.
Also, because South Korea and Japan are also planning to tighten the management of imported wood products, this would directly impact the country’s exports to those markets.
The South Korean government will require importers to declare the legality and origin of wood and wood products imported into the country starting in late 2017, while Japan will do the same in March 2018.
Vietnamese wood processors and exporters must therefore devise solutions and long-term strategies to reduce risks and boost export growth. Local processors should choose clean raw wood to meet importers’ requirements, he said.