Timber and wood product exports grow

The four-month export value of timber and wood products reached an estimated US$4.8 billion, up 23.7 percent year-on-year. Of the sum, the export value of wood products accounted for US$3.3 billion, up 25.8 percent year-on-year.

Do Xuan Lap, President of the Vietnam Timber and Forest Product Association, said that positive signs of consumer demand in major markets such as the US and Europe have led to an increase in the number of orders for timber and wood product exports. Given the export growth momentum in the first four months, the wood sector’s is forecast to have promising prospects in 2024.

Vietnam is one of the world-leading wood exporters and its timber and wood products have penetrated major markets such as the US, the EU, the Republic of Korea, and Japan, with increasing presence in emerging markets such as the United Arab Emirates (UAE) and India.

Timber and wood product exports reach nearly US$4.8 billion in the first four months of 2024

Vietnam’s advantages for forestry development, business support policies, and free trade agreements have enabled Vietnam to achieve significant success in exporting timber and wood products. Domestic businesses are investing in new technologies and digital transformation to develop new products and services, enhance competitiveness, and increase efficiency and productivity.

Despite its advantages, the wood industry still faces numerous challenges as Vietnam’s major export markets increasingly demand strict control over the legality of timber source, ensuring no contribution to deforestation, promoting sustainable production, and reducing greenhouse gas emissions. The risk of trade fraud and counterfeit origin of goods is also on the rise. Complex trade competition poses a significant challenge for Vietnamese wood export businesses.

Due to their limited internal capacity, a majority of domestic businesses engage in manufacturing according to the orders and designs of foreign distributors. Despite continuous growth in production and exports, the reliance on cheap labor and raw materials results in low value-added products. Most enterprises are small in size and lack the capacity to build their own brands. They are also less resilient to sudden and continuous market fluctuations. Their products are not distributed directly to customers, but go through distribution channels and foreign enterprises.

To develop in a sustainable manner, along with complying with environmental and origin regulations, the Vietnamese wood sector should focus on investing in design and innovation to enhance the added value of products.

Many wood businesses have recently conducted market trend research and shifted from manufacturing according to foreign orders to designing new, eye-catching products of high-quality, which have been praised by foreign customers. The Vietnamese wood processing and furniture industry is moving in the right direction, aiming to increase the export value and enhance the position and brand of the Vietnamese wood industry in the international market.

Nguyen Liem, President of the Binh Duong Wood Processing Association, said that the US has been the key export market for the Vietnamese wood industry. Exports to this market account for 53.5 percent of the total value of Vietnam’s timber and wood product exports.

In the early months of 2024, timber and wood product exports to the US recovered significantly thanks to increased market demand and reduced inventory. US importers consider Vietnam as a major global supplier of timber and wood products, especially wooden furniture. The US is currently the top importer of Vietnamese timber and wood products, while Vietnam is the number-one supplier of wooden furniture to the US.

However, relying heavily on a single market is indeed a weakness for Vietnam. In fact, when the US market’s demand decreased, Vietnam’s export value also fell sharply. Therefore, Vietnamese wood businesses need to continue diversifying export markets to minimize risks.