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The export turnover of wood and wood products in 7 months of 2021 reached US$ 9.58 billion, up 55% over the same period in 2020 which is considered a remarkable growth in the context of complicated epidemic developments.
Hong Nhung-Minh Hung (VNA/Vietnam+)
Workers of Thuan An Wood Processing Joint Stock Company checking the details of wooden bed frames
(Photo: Hong Nhung/VNA)
According to statistics of the General Department of Customs, in the first seven months of 2021, the export turnover of wood and wood products reached US$9.58 billion, up 55% over the same period in 2020; in which, wood products reached 7.44 billion USD, up 64% over the same period in 2020.According to statistics of the General Department of Customs, in the first seven months of 2021, the export turnover of wood and wood products reached US$9.58 billion, up 55% over the same period in 2020; in which, wood products reached 7.44 billion USD, up 64% over the same period in 2020.
Experts in Vietnam’s wood processing and export industry assessed that this is an outstanding growth even in the situation that Vietnam and other countries around the world respond to the COVID-19 epidemic.
The COVID-19 epidemic has had a strong impact on most of Vietnam’s processing and export industries; in which, it is necessary to mention the industries related to agricultural products, which have a short shelf life and use. However, for the wood processing and export industry, this is an opportunity, because the demand for shopping and home decoration of foreign customers increases.
According to Mr. Dien Quang Hiep, Chairman of Binh Duong Wood Association, currently, the main export market of Binh Duong wood processing industry is growing significantly.
The US market accounted for more than 65% of Binh Duong’s total wood export turnover, up 81% over the same period in 2020; Hong Kong (China) market accounted for 8.5%, up more than 47%; Taiwan (China) market accounted for 5.6%, up 43%.
In particular, since the Vietnam-EU Free Trade Agreement (EVFTA) officially took effect in August 2020, Vietnam’s wood industry in general and Binh Duong’s wood processing and export industry in particular will expectly expand to the consumption market in the European countries.
Similar to Binh Duong, Binh Dinh wood processing and exporting enterprises also have a big breakthrough in wood export in 2021. Mr. Ngo Van General, Director of Binh Dinh Department of Industry and Trade said, currently, Binh Dinh furniture has exported directly to 5 continents with 70 countries and territories. Most are exported to Europe, Oceania, America, Asia and Africa.
[Optimal signal of exporting wood and wood products to the US market][Optimal signal of exporting wood and wood products to the US market]
In 2021, Binh Dinh’s furniture exporters have signed orders until the end of the third quarter of 2021. Products including wooden furniture exported to the US market are expected to increase quite a bit.
The COVID-19 epidemic has caused many difficulties for trade and transportation activities, directly affecting the working and living needs of people. Therefore, consumers have actively purchased tools and work tools to maintain work and life at home. This leads to the wood processing and exporting industry, especially furniture used for office furniture, living room, dining room, which is very positive.
The US housing market is trending strongly when the US Government lends at low interest rates, many families build new or repair houses, which also promotes a rapid increase in furniture purchases. This is an opportunity for businesses to export wood and wood products from Vietnam, especially wooden furniture.
“In addition, many countries have gradually lifted control measures and blockades to bring production and consumption activities back to life. Therefore, Binh’s export turnover of living room and dining room furniture Duong is forecasted to have many opportunities for rapid growth in the coming time,” said Mr. Dien Quang Hiep.
In order to be able to meet the import orders of wood pouring into Binh Duong, Binh Duong wood enterprises have quickly adapted and changed their production and trading methods accordingly.
Currently, many businesses in industries in industrial parks in Binh Duong are renting more land to open factories to meet the orders transferred from the Chinese market, when the country is subject to a 25% tax rate when importing. into the US market.
Mr. Bui Chinh Nghia, Deputy Director of the General Department of Forestry of Vietnam said, along with the US, Japan, Hong Kong (China) markets in the last months of 2021, the export turnover of wood and wood products of Vietnam Vietnam to the European market will increase sharply, when the COVID-19 epidemic is gradually controlled; Europe gradually relaxes epidemic prevention measures, opening up trade more conveniently.
The economic prosperity of European countries will be one of the factors supporting Vietnam’s exports of wood and wood products to this market. In addition, the EVFTA Agreement is gradually being implemented more comprehensively and effectively.
Dealing with obstacles
Vietnam’s wood processing and export industry is still on an outstanding growth momentum, even in the context that the whole country is responding to the COVID-19 epidemic. However, the whole industry is still facing objective obstacles besides the COVID-19 epidemic.
Producing wooden furniture for export to the EU market. (Photo: VNA)
According to Mr. Nguyen Liem, Chairman of the Board of Directors of Lam Viet Company (Binh Duong), the export value of the wood industry has increased sharply in the past 2 years, which is a good thing, but there are also potential risk factors. because the US side will increase defense measures for items with sudden growth.According to Mr. Nguyen Liem, Chairman of the Board of Directors of Lam Viet Company (Binh Duong), the export value of the wood industry has increased sharply in the past 2 years, which is a good thing, but there are also potential risk factors. because the US side will increase defense measures for items with sudden growth.
Currently, US authorities are very interested in investment activities with signs of commercial fraud and origin. Therefore, enterprises that export living room and dining room furniture need to be careful to avoid becoming a transshipment point for goods to a third country. If the US imposes sanctions on Vietnam’s wood industry, the whole industry will be seriously affected.
The Import-Export Department (Ministry of Industry and Trade) also recommends that Vietnamese exporters need to strictly comply with the regulations on certification of origin and not abet acts of origin fraud or evasion. trade defense measures.
The US market currently accounts for over 60% of the total export turnover of the entire Binh Duong wood processing export industry. Particularly for living room and dining room furniture, the high growth rate in recent years is a positive sign.
Along with the new regulations of the US market, Vietnam’s wood processing and export industry is also facing a common problem of the world economy. That is the shortage of empty containers to export goods through international ports before being delivered to customers around the world.
According to the logistics industry data report of SSI Research, Vietnam is not involved in intercontinental shipping. Therefore, Vietnamese enterprises in general, and wood processing and exporting enterprises in particular, are negatively affected by the increase in freight rates on long routes.
Shipping costs to the US and European markets have increased by 2-3 times in the past year, most recently the shipping fee has increased 10 times compared to July 2021.
Most companies in Vietnam import on CIF terms (the seller fulfills the responsibility when the goods are loaded on deck at the port of loading, but bears the cost of transporting them to the port of destination) and export on the terms. FOB (ship side delivery). Companies that export on FOB terms do not incur direct freight charges but must share in the increased shipping costs by reducing the average selling price.
Experts in the maritime transport industry, logistics experts estimate, freight rates may peak in the fourth quarter of 2021 and then adjust slightly in early 2022. Freight rates may decrease significantly in 2023 when the supply of ships recently put into operation, but maintained at a higher level than the level before the COVID-19 epidemic.
In order for Vietnam’s wood processing and export industry to be convenient in finding empty containers for transportation and delivery in accordance with the signed contract, the local Departments of Industry and Trade have proposed to the Ministry of Industry and Trade a reasonable direction for the industry. are developing favorably in this COVID-19 pandemic response situation.
Mr. Ngo Van General, Director of Binh Dinh Department of Industry and Trade, said that the province will propose the Ministry of Industry and Trade to take measures to create a link channel, connecting major domestic and foreign shipping lines together to stabilize freight rates. in import and export in general and in export wood transportation in particular.
At the same time, the Ministry of Industry and Trade has programs and policies to continue supporting businesses to effectively implement trade promotion programs to exploit major markets such as the United States, Europe, Japan, and South Korea. as well as potential emerging markets today.
Hong Nhung-Minh Hung (VNA/Vietnam+)