Wood industry advances toward the US$ 20 billion target

Good news right in the first month

According to the Vietnam Customs, right in the first month of 2022, export turnover of wood and wooden products has reached a new high level at US$ 1.549 billion, a growth of 14.3% in comparison to the same period last year.

This is the third time the export turnover surpasses the record of US$ 1.5 billion in a month in the history of exporting wood and wooden products.

The first time the export turnover of wood and wooden products exceeded US$ 1.5 billion a month was in March 2021, when it reached US$ 1.512 billion.

Then, due to the Covid-19 pandemic, the export turnover in April 2021 dropped sharply to only nearly US$ 700 million. In May 2021, the export turnover recovered strongly when reaching US$ 1.4 billion.

And by June 2021, it exceeded US$ 1.5 billion in a month for the second time when reaching US$ 1.55 billion. This is the record export turnover in a month of the wood industry.

After reaching a record in June 2021, also due to the Covid-19 pandemic, wood exports in the following months decreased, with some months being below US$ 1 billion. Until November 2021, the export of wood and wooden products returned to the milestone of more than US$ 1 billion USD. And it was only in January 2022 that it surpassed the US$ 1.5 billion mark for the third time. This is an impressive start for the wood industry in 2022.

With an export turnover of more than US$ 1.5 billion, wood and wooden products have been among 7 groups of export goods of the country with a turnover of more than US$ 1 billion in the first month of the year and in the "top 3" of the commodity groups with the double-digit growth (ranked second in growth after textiles and garments). This shows that the export of wood and wooden products is making a larger contribution to the overall export of the country.

Going to exceed the US$ 16.5 billion target

After being significantly affected by the Covid-19 pandemic, the global interior and exterior products market has recovered since the end of 2021 and is on the trend of continuing strong growth as consumers in many countries chose working from home more than before.

According to the Center for Industrial Studies of Italy (CSIL), by the end of 2021, the total value of interior and exterior products production in the world has reached US$ 500 billion, and a third of which is for export. Thus, the global export value of interior and exterior products is currently very large, reaching about US$ 170 billion.

Surveying in 100 markets, CSIL assesses that, in 2022, the global furniture market will grow by about 4%. Among the major markets (furniture consumption is forecasted to be over US$ 5 billion a year), the markets in Europe and Asia will have the strongest growth. Besides, the main export market of Vietnam's wood industry is still North America, and will continue to grow steadily.

The world market is still very open for Vietnam's wood industry. Exports of wood and wooden products still have a lot of room to accelerate growth, while in some of the world's leading wooden furniture import markets, Vietnam's market share is still modest.

Statistics and information from the Department of Import - Export (Ministry of Industry and Trade) show that, in the first 10 months of 2021, the EU imported nearly US$ 21 billion of wooden furniture. In which, furniture imported from Vietnam only accounted for a modest share of 2.4%. In another world’s leading market, the UK, Vietnamese wooden furniture accounted for only 7.5% of the total import value in the first 10 months of 2021.

In the global furniture import and export market, Vietnam's export value only accounts for about 6%.

In the first months of 2022, many wooden furniture suppliers to the EU are still struggling with the Covid-19 pandemic, plus the pressure of rising sea freight rates, which limits the supply of wood and wooden products for this market.

Therefore, this is an opportunity for Vietnam's wooden furniture exporters to make the most of the incentives and advantages brought by the EVFTA to increase the market share of wooden furniture exports to the EU market in 2022 and the coming years.

With positive signals from the market, many wood industry experts believe that this year's export of wood and wooden products will achieve the target of US$ 16.5 billion as the Government has assigned. Speaking with the press, Do Xuan Lap, Chairman of the Vietnam Timber and Forest Product Association, said that the export of wood and wooden products can reach US$ 17.5 - 18 billion this year.

Active in finding source of wood materials

In favorable condition of the market, to achieve the export target in 2022, the wood industry still faces significant challenges in terms of logistics, supply and price of wood materials, etc.

The analysis of some wood industry entrepreneurs show that, logistics is one of the biggest difficulties that the wood industry will continue to face in 2022. This situation may continue until the end of the year.

High transportation costs have contributed significantly to the increase in the price of imported wood materials. In addition, domestic demand increases sharply when the construction boom has also contributed to a sharp increase in the global price of wood materials.

The Covid-19 pandemic has also had a significant impact on the world's supply of raw wood because it has restricted logging in many countries. Signs of a shortage of raw wood have appeared since the end of 2021, leading to the price of wood materials continues to increase from the beginning of 2022.

To be more proactive on wood materials, one solution that businesses need to consider is to increase the use of domestic wood to reduce dependence on imported wood.

In the long term, to be more proactive on raw materials, the wood industry needs to develop large timber, legal and sustainable plantations, with policies such as allowing timber businesses to access afforestation land funds, promoting linkages between afforestation households and wood processing companies.

With export turnover of wood and wooden products reaching nearly US$ 16 billion in 2021, Vietnam is currently leading in Southeast Asia, second in Asia and fourth in the world. As for the export of wooden furniture, Vietnam is leading in Southeast Asia, second in Asia and fifth in the world.

The position of Vietnamese wood and wooden products is clearly shown in some of the largest import markets. According to the Department of Import – Export, in the first 10 months of 2021, the 5 largest wooden furniture import markets in the world are the EU (US$ 21 billion), the US (US$ 20 billion), the UK (US$ 4.0 billion), Japan (US$ 1.9 billion) and South Korea (US$ 1.1 billion). In which, Vietnam accounted for 38.7% in the US market; 21.8% in Japan; 15% in Korea.