Wooden goods exports forecast to drop this year

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Furniture is on display at an exhibition in HCMC. Revenue from wooden products exports is projected at US$7.4 billion this year, US$200 million lower than targeted - PHOTO: THANH HOA.

The association’s vice chairman and general secretary, Nguyen Ton Quyen, was quoted by the Vietnam News Agency as saying that outbound sales of wooden products in the first half of 2016 are estimated at US$3.17 billion, a year-on-year decrease of 0.1%.

Quyen pointed out a sharp drop in wood chip exports in the period as one of the reasons.

Vietnam ships abroad 3.4-4 million tons of wood chips worth about US$850 million a year. But since the Ministry of Finance’s Circular 182/2015/TT-BTC on preferential export and import tariffs on taxable items was effective on January 1, export duties for wood chips have been adjusted up from 0% to 2%, leading importers to cut purchases and prices by US$8-10 per ton.

About one million tons of wood chips has been in stock in the northern provinces of Tuyen Quang, Phu Tho and Yen Bai and about to be discarded due to weak demand of importers, including China.

Quyen said export of outdoor furniture, which mainly goes to the European Union (EU), has dropped in the January-June period, and the UK’s vote to leave the EU would impact shipments of wooden goods to the UK in the coming time.

The sterling and euro have dipped significantly against the U.S. dollar as a result of the UK referendum, which is often called Brexit, while the Vietnam dong has weakened slightly against the greenback. This will erode the competitiveness of Vietnamese wooden products in the EU and exports to this market are projected to go down.

Every year the UK imports only US$100 million worth of wooden products from Vietnam. Major export earners are outdoor furniture, wooden chairs, and bedroom and office furniture.

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Data of the Ministry of Agriculture and Rural Development showed that the U.S., Japan and China have remained Vietnam’s top three importers of wooden products, accounting for nearly 68% of the total. The EU comes fourth.