In the first half of the year, exports of wood and wooden furniture products fell deeply. Photo: ST

Sharp decline after years of double-number growth

Ngo Sy Hoai, Vice President and General Secretary of the Vietnam Timber and Forest Products Association (VIFOREST) said that the export turnover of the wood industry has decreased sharply after many years of increasing two-number growth. The cause except the general effects such as geopolitical conflicts, inflation, and reduced consumer demand, is also due to the US market's investigation into some Vietnamese wood and furniture products, related regulations to the environment and forests of the EU…

Analyzing the huge market of the wood industry, Mr. Ngo Sy Hoai said that the US is a very large market for Vietnam's wood industry, the export turnover of Vietnam's wood products to the US accounts for 50- 55% of total export value. In 2022, despite the Covid-19 pandemic, Vietnam still exported USD 8.3 billion of wood and wood products to the United States. Especially the previous year, despite the pandemic, export turnover was still nearly USD 9 billion.

“Vietnam's wood products exported to the US usually account for 35-40% of the total import value of the US. However, this year, the export of wood and wood products to the United States decreased quite sharply, even deeper than the average decrease. Specifically, the export of wood and wood products to the US in 6 months decreased by 32.8%, if compared to the total value of Vietnam's exports to the US decreased by more than 21%, the wood industry has a deeper decline,” representatives of VIFOREST said.

According to Mr. Ngo Sy Hoai, in addition to the general reason about the economic situation, consumers tighten spending; the wood industry is affected by the decline of the real estate industry. “Usually wood products follow the real estate industry; in the United States the real estate industry in the first months of the year is quiet. Therefore, the total value of imported wood products from all sources to the United States has decreased, not only Vietnam, "said Ngo Sy Hoai.

Although the results in the first months of the year were not positive, according to Mr. Ngo Sy Hoai, there were still optimistic signs. For example, with the US market, in June, exports to this market were USD 638 million, down only 18.4% over the same period. Therefore, VIFOREST's representative believes that in the coming months, when the market situation gradually warms up, it can be maintained at least not as deeply as now because Vietnamese enterprises have affirmed their position in the market, proving their bravery and real competitiveness.

On the side of wood businesses, Ms. Le Hai Lieu, a representative of Duc Thanh Wood Company, also said that recently, signs of optimism have begun when there are units that continue to order, inquire and announce the quantity intend to place in the future. However, the general situation has not yet returned to the way it was. A representative of Duc Thanh Wood Company said that sales decreased due to the economy in general, consumers tightened spending due to difficult life; if the economic situation stabilizes, the demand will be great.

Capture the signal of optimism

Ngo Sy Hoai said that even though he is facing a big challenge, he should not be too pessimistic because this is only temporary. In order to regain export growth for the commodity industry, including wood products, he said he needed the support of the Ministry of Industry and Trade, Vietnam's wood product marketing deal to find markets and convey the message of Vietnam about strongly implementing the commitment to provide legal wood products; prepare to strictly implement EU regulations.

According to a representative of the Vietnam Trade Office in Canada, the potential for exporting wood products to the Canadian market is still great. For example, wood products and wood-based charcoal are items with high potential for rapid growth in the area. Every year, Canada has an import demand of about USD 4 billion for this group of products. Although in the first months of 2023, Canada had a sharp decrease in demand for this item compared to the same period in 2022 (down 17.2%). However, along with Germany, Mexico, Vietnam is a market with high export growth to Canada.

Currently, Canada is sharply reducing imports from China, Vietnam has many opportunities to increase export turnover of product groups. If it maintains the same growth rate as in the first months of the year, it is expected that in 2023, Vietnam can export about USD 45 million to Canada. This is a Vietnamese product with a high growth rate after CPTPP, from USD 11 million to USD 32 million, or 233%.

Tran Ngoc Quan, Trade Counselor, Trade Office of Vietnam in Belgium and the EU, said that the EVFTA Agreement helps Vietnam's textile, garment, footwear and wood products industries increase exports to the EU. To take advantage of these advantages, meeting the rules of origin is very important. On the other hand, the EU is strongly shifting to a circular economy, domestic enterprises need to transform because when the regulations come into force, it will strongly affect their exports. The Vietnam Trade Office is ready to support domestic enterprises to participate in fairs and exhibitions, seek opportunities for trade connections, and expand export opportunities in the EU.

Meanwhile, in the United States, the potential export market of many products, including wood products, said Mr. Do Manh Quyen, Head of Trade Office, Vietnam Trade Office Branch in Houston, USA. , it is necessary to find the cause to overcome and regain the growth momentum. Enterprises need to redefine their domestic production and business strategies, clearly define markets and products, learn regulations and barriers to export to large markets such as the United States; improve the quality of goods as well as production technology.

In order to develop the market, businesses in the outside industry need to find large distribution channels, need to find niche markets because large distributors have the obstacle that when they reduce demand, they will disconnect, making business activities worse. Exports of enterprises are disrupted. In particular, when promoting trade, it is advisable to seek out local businesses and people, sign consulting contracts to find niche markets, handle inventory and retail goods.