Signs of recovery in Vietnam's export of wood to the United States

Vietnam's export of wood and wood products to the United States has suffered from a prolonged period of continuous negative growth since November 2022. Subsequently, exports to this market experienced a sustained decline over the following months, with several months witnessing a reduction rate of over 60%, especially during January 2023.

Vietnam's wood and wood product exports to the United States exhibited signs of recovery after nearly one year of continuous negative growth in September 2023. According to the General Department of Customs, wood and wood product exports to the United States reached 616.9 million USD in September 2023, which is an increase of 7.5% compared to September 2022.

The United States is the largest market and accounts for more than half of the value of Vietnam's wood and wood product exports. Therefore, when exports to the U.S. recover, it immediately has a positive impact on the overall wood industry exports. Also in September, wood and wood product exports reached $1.14 billion, a 1% increase compared to September 2022. While the growth is modest, this marks the first month in 2023 in which wood and wood product exports showed growth compared to the same period in 2022.

In aggregate, for the first nine months of 2023, wood and wood product exports to the U.S. amounted to $5.2 billion, a 24.2% decrease compared to the same period in 2022. Though still showing a decline, the rate of decrease has been gradually diminishing. In reference to exports to all destinations, for the initial nine months of 2023, the collective value of wood and wood product exports amounted to $9.6 billion, signifying a 21.8% decrease compared to the same period in 2022, and this decline has also been steadily narrowing in recent months.

Vietnam's export of wood and wood products to the United States as well as other markets has seen a resurgence as demand for imports rose within the last few months. Accordingly, manufacturers and distributors of household wooden furniture who are members of the Vietnam Timber and Forest Products Association report a 23% increase in new order volumes from the United States in June 2023 compared to June 2022.

In a broader context, the market for wooden furniture in the United States is exhibiting gradual recovery. Over the months spanning from June to August 2023, the wooden furniture market has consistently demonstrated growth and ranks among four industries in the United States which have reported increased levels of new orders. This development signifies an opportunity for the Vietnamese wood industry to improve their order portfolios towards the year's end.

Mr. Dwayne Wood, General Director of Kaiser Vietnam located in Ben Cat town, Binh Duong province, noted that furniture importers have resumed their activities since August 2023, thereby alleviating some of the pressure on the company's production facilities.

According to Mr. Wood, Kaiser Vietnam's primary target market is the United States. He also emphasized that in addition to the substantial consumption demand, Vietnamese furniture exports to this market currently enjoys a competitive advantage concerning customs duties.

Recognizing the favorable long-term prospects of the United States market, Kaiser Vietnam recently focused on streamlining its production model to enhance efficiency and invested in product development to provide customers with a wider range of choices. The company also prioritized the preservation of its workforce, recognizing them as a critical competitive resource and the foundation for swift responsiveness when export orders are restored.

According to experts in the industry, the recovery of Vietnamese wood and wood product exports to the United States will contribute significantly to the considerable growth of the wood industry in the final months of the year. Namely, the value of exports to the United States accounts for 53.7% of Vietnam's export turnover for wood and wood product exports in the first nine months of 2023.

Consequently, Vietnam remains as the largest supplier of wooden furniture to the United States. Reports from the U.S. International Trade Commission shows that Vietnamese wooden furniture imports to the United States reached approximately 4 billion USD in the first seven months of 2023, representing 36% of the total imports into the country.