Wood exports to maintain high growth towards year's end

Vietnam's wood exports reported a strong recovery during the first half 2024. According to the General Department of Vietnam Customs, revenue from wood exports reached 7.476 billion USD in the first six months of 2024, marking an increase of 23.1% compared to the corresponding period in 2023. Notably, revenue from wood product exports reached 5.066 billion USD, marking an increase of 22.2% compared to the corresponding period in 2023.

The Agency of Foreign Trade (Ministry of Industry and Trade) reported that the increased demand in various major export markets around the world acted as the primary driving force behind the positive growth of wood exports in the first six months of 2024. This influence is reflected in the growth of Vietnam's key wood exports.

Within the structure of Vietnam's wood exports, wooden furniture has maintained its role as a key export item, accounting for the highest export revenue in recent years. Namely, this product group achieved an export revenue of 3.8 billion USD in the first five months of 2024, marking an increase of 25.8% compared to the corresponding period in 2023.

The majority of wooden furniture export items experienced positive growth in the first five months of 2024. Among this product group, wooden frame chairs saw the most significant growth at 1.3 billion USD in the first five months of 2024, marking an increase of 24% compared to the corresponding period in 2023; followed by living room and dining room furniture at 1 billion USD, an increase of 25% compared to the corresponding period in 2023, and so on.

In addition to wooden furniture, several other wood export items also experienced exceptional growth in the first five months of 2024. Namely, wood chips generated a total revenue of 1.1 billion USD, marking an increase of 35% compared to the corresponding period in 2023; wood boards and flooring generated a total revenue of 815 million USD, marking an increase of 25%; wood pellets generated a total revenue of 282 million USD, marking an increase of 10%; and so on.

During a program held in early July as part of the "Business Decoding" event series, Nguyen Quoc Khanh, Chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), noted that the growth in Vietnam's wood exports can be attributed to the recovery in various global markets, including the US and the EU. Notably, the US continues to be the largest market for Vietnamese wood products, accounting for 55% of Vietnam's wood export revenue.

Vietnamese wood companies' ability to keep pace with the latest trends in the US market has allowed Vietnamese wood products to meet consumer preferences. Consequently, despite being outside of the peak season for wood product consumption, the revenue from Vietnam's wood exports still reached between 1.2 and 1.4 billion USD per month in recent months. Chairman Khanh projected that at the current growth rate, the revenue from Vietnam's wood exports can reach upwards of 1.6 to 1.8 billion USD per month as the international market enters the peak shopping season towards the end of the year. Accordingly, this increase can bring the total annual export revenue to an estimated 17.5 billion USD.

Binh Duong province has maintained its position as the key contributor to wood exports nationwide. The province's wood industry exported nearly 3 billion USD worth of wood products in the first six months of 2024, representing 40% of the country's total export revenue.

According to Nguyen Liem, Chairman of the Binh Duong Furniture Association (BIFA), the strong growth in Vietnam's wood exports in the first half of 2024 offers a promising prospect for Vietnam's wood industry amidst global challenges, including supply chain disruptions caused by tensions in the Red Sea.

Chairman Liem further noted that despite remarkable export results in the first half of the year, Binh Duong's wood industry must proactively adapt to the circumstances in order to promote sustainable growth and development; thereby supporting flexible changes in production and export processes. Accordingly, Binh Duong province, and Vietnam as a whole, must focus on developing technology and reinforcing supply chains from raw materials to logistics.

At the current growth rate, Vietnam's wood exports are projected to maintain double-digit growth in the second half of 2024. According to the Agency of Foreign Trade, the annual trend of increasing wood imports, specifically for wooden furniture products in major markets, typically occurs within the last three months of the year as the housing market closes, and the demand for new, renovated furniture increases.

Controlled inflation in major markets drives consumer activity; and major economies around the world expect positive growth in 2024, which will further stimulate the development of the global wood furniture market. According to its April 2024 Global Economic Outlook report, IMF raised its GDP growth forecast to 2.7% for the US and 0.8% for the EU.