Wooden exports fall sharply after breakthrough growth

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Bui Chinh Nghia, Deputy Director of the Vietnam Administration of Forestry speaks at the conference. Photo: Huong Quynh

On September 7, speaking at a briefing on wood and forest product processing held by the Ministry of Agriculture and Rural Development, Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said the forestry sector in recent years has emerged as a major contributor to the growth of the agricultural sector in general, especially for exports.

In 2020, exports of wood and forest products reached US$13.17 billion, up by 16%; trade surplus of more than US$10 billion. In the first half of this year, exports of wood and forest products continued to grow strongly compared to the same period last year.

However, when the pandemic broke out strongly in many provinces and cities, disrupting the value chain, it had a profound effect on the wood processing and export industry. From July 2021, exports of wood and wood products decreased significantly, especially a serious decrease in August. Exports to many markets were deeply affected.

Bui Chinh Nghia, Deputy Director of the Vietnam Administration of Forestry (Ministry of Agriculture and Rural Development), said in the first eight months of this year, the export of wood and forest products is estimated at US$11.2 billion, up by 42.7% compared to the same period in 2020. Of which, wood and wood products are US$10.4 billion, up by 41.9%; non-timber forest products reached US$0.79 billion, up 54.2%.

Vietnam’s wood products are exported to more than 130 countries and territories. In which, the US, Japan, China, the EU and South Korean markets continue to be the main export markets, the total export value in five markets accounts for more than 90% of the total export value of the country.

Looking back at the process from the beginning of the year to the present, Nghia said in 2021, the wood and forest product processing and export industry is forecast to have a similar growth rate compared to 2020, about more than 15% due to many advantages.

Typically, the impact of the European Union Vietnam Free Trade Agreement (EVFFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and other FTAs, the taking advantage of the commercial competition of some countries and consumer demand of wood products of the world market.

According to the forecast, from the beginning of the year, wood businesses have received many orders from partners, some of them proposed to supply products until the end of 2021.

In the first five months of the year, the wood processing and export industry had breakthrough growth, with export value reaching US$7.1 billion, up 62.9% compared to the same period in 2020.

However, the impact of the 4th disease outbreak has had a negative impact, seriously affecting the production and processing activities of wood industry enterprises, especially in the southern region (including HCM City, Dong Nai province and Binh Duong province).

This is an area with many wood processing firms (accounting for more than 70% of the total number of wood processing businesses, export value accounts for nearly 80% of the total export turnover of the country).

According to a report of the Vietnam Timber and Forest Products Association, more than 50% of firms have had to stop, close and reduce production so far.

“In the last three months, the export value has decreased significantly, on average in three months of June July 2021 and August 2021, down by more than 16% compared to the previous months. Particularly, August 2021 is estimated to decrease by more than 22% compared to July 2021,” Nghia said.

The General Department of Forestry determines will continue to coordinate to grasp the difficulties and problems of businesses, promptly advise, handle, and create favourable conditions for production and business activities of enterprises in the wood industry.

At the same time, suggested the Vietnam Timber and Forest Products Association propagate and mobilise businesses to strictly comply with the provisions of the law on the origin and origin of products.

“Continue to reflect on difficulties and obstacles in the implementation of legal regulations to be considered, handled and created favourable conditions for businesses, promptly detected and notified state management agencies to strictly handle acts of commercial fraud,” the leader of the General Department of Forestry said.