Vietnam wood exports face uphill battle

Vietnam's export turnover of wood and wooden products reached an estimated $10.8 billion in the first 10 months of the year, down 19.9% year-on-year, according to the Ministry of Industry and Trade.

The challenges like strategic competition between major countries, fierce conflicts in Russia and Ukraine, recent fighting in the Gaza Strip, and slow global economic growth have affected export activities in many economies, including Vietnam.

Tran Lam Son, deputy general director of Thien Minh Import-Export Co., Ltd., which focuses on exporting wood products to the U.S., told The Investor that exports are still facing difficulties due to lack of demand. "Consumers care more about gasoline and food than furniture," he added.

Export turnover of the wood industry, one of Vietnam's key export industries, has continuously declined since the beginning of 2023 on a decrease in aggregate demand.

However, there are positive signs of a recovery. Businesses in the wood industry have been receiving more orders for the year-end shopping season. Along with that, U.S. and European customers have encountered difficulties in the Chinese market, so are looking for alternatives.

It is anticipated that global economic growth will slow to 2.7% in 2023, the lowest level since the 2008 global financial crisis. Consumer demand for non-essential items will decline as a result of countries hiking interest rates and implementing inflation control measures. Economic recovery and development will also stall, the trade ministry stated in a report.

"Therefore, the industry's export target of $17 billion in 2023 cannot be achieved. It is expected that in the last three months of 2023, exports of wood and wooden products will reach more than $4 billion, bringing export turnover in 2023 to about $13.6 billion to $14 billion," it said.

The ministry noted that the potential to expand the export of wood and wooden products in the near future is huge because the size of the global market is up to $200 billion.

Although Vietnam is one of the world’s top five largest wooden furniture exporting countries, it only exports around $16 billion per year. Therefore, wood industry enterprises are offering solutions to ensure the sustainable development of the market, such as applying technology and proactively sourcing raw materials to improve product quality," it added.

Last year, wood and wooden product exports reached $15.8 billion, official data shows.