2 scenarios of wood exporting of Vietnam in the last coming months of 2021

According to the Directorate of Customs, exports turnover of wood and wood products of Vietnam in the first 7 months of 2021 reached US$ 9.26 billion, increased 57% compared to the same period of 2020.

Since July 2021, the social distancing methods applied to prevent Covid-19 in many provinces and cities in Vietnam leads to the lagging in export, production and doing business of many enterprises in wooden industry.

Exports turnover of wood and wood products in July reached nearly US$ 1.3 billion, decreased 17.3% when compared to the previous month.

In the first half of August, exports turnover decreased much more, with the turnover reached only US$ 373.8 million, down up to 45.5% compared to the same period of July.

There are possibilities that the social distancing procedures will endure, affect badly to the production and doing business of enterprises. It is forecasted that the exports turnover in the second half of August until the pandemic in under control will continue to decrease deeply.

The Covid-19 affects negatively to all the aspects of wooden industry, especially those companies in the big wood processing centers like Binh Duong province, Ho Chi Minh city, Binh Dinh province. The social distancing procedures lead to supply chain disruption, orders reduction.

Reducing the amount of workers, downsizing or closing factories are the response measures currently being taken by companies. Many of them try to maintain production at 20 - 50% of capacity compared to before the time of social distancing, in order to partially meet the requirements of customers and maintain jobs for employees. Some companies with Covid-19 infected cases had to close completely.

A recent survey conducted in Ho Chi Minh city, Binh Duong province and Dong Nai province by 3 associations including Handicraft and Wood IndustryAssociation of Ho Chi Minh City (HAWA), Binh Duong Furniture Association (BIFA) and Dong Nai Wood and Handicraft Association (DOWA) at their 265 enterprises members, shows some alarming factors: By August 18, 54% of the members halted production, 46% of the members reduced the capacity due to applying “3 on-site” rules. And up to 87% of the employees of the companies surveyed temporarily lost job.

Dealing with the complicated developments of the Covid-19 pandemic in Vietnam, a research group included Ph.D To Xuan Phuc (Forest Trends), Cao Thi Cam (Vietnam Forestry Association) and Tran Le Huy (Forest Products Association of Binh Dinh) introduced 2 scenarios of wood exporting in the last coming months of this year.

In the first scenario, the research group assumes a decrease as of the first half of Auguts will last to the end of the third quarter. By that time, the Covid-19 pandemic will be controlled and the vaccination be conducted in the whole country. The exports turnover will begin recuperating from the fourth quarter, butit reaches only around 70% of the average turnover of the two first quarters. If the assumption is accurate, the gross wood exports turnover of 2021 will reach US$ 13.55 billion.

In the second scenario, the research group assumes from now on to the end of this year, the Covid-19 pandemic will not be controlled effectively yet. In that case, the decline in exports turnover will last till the end of the fourth quarter, and the exports turnover of the fourth quarter is only 70% as of the exports turnover of the third quarter.

In other words, the above assumption of decline in exports turnover has not reached its bottom, and it will decrease deeply in the last months of this year. If it happens, the gross wood exports turnover of 2021 will reach US$ 12.69 billion.