According to the calculation of the General Administration of Customs of Vietnam, the growth rate of wood and wood products exports to the US market slowed down in March, down 5.9% compared with March last year; the total export value of wood and wood products in May was 1.38 billion US dollars, a year-on-year decrease. That's down nearly $100 million over the same period.
Home Micro Watch latest news: Vietnam saw strong growth in exports of wood and wood products in the first few months of the year. Total exports in January alone reached US$1.55 billion, up 14.3% year-on-year. Except for February (affected by the Vietnamese New Year holiday), in the first five months of this year, exports of similar products hit a high of US$1.3 billion to nearly US$1.6 billion. Total timber exports in the first five months are expected to reach around $7 billion, up 4.6 percent from the same period last year. 

Vietnamese timber company workers produce furniture

Workers of Vietnam Timber Company are producing furniture for export

However, export volumes have been on a downward trend in recent months. According to calculations by the General Department of Customs of Vietnam, the growth rate of exports of wood and wood products to the U.S. market slowed in March, falling by 5.9% compared with March last year; the total exports of wood and wood products in May were 1.38 billion US dollars, down 4.1% from May 2021; total exports in the first half of June were about 661 million US dollars, down nearly 100 million US dollars from the same period last year.

According to the Import-Export Department under the Ministry of Industry and Trade, the slowdown in exports is due to persistently high inflation in many major export markets, prompting consumers to tighten their spending. In addition, the prices of commodities, raw materials and imported materials needed to produce products have also risen sharply due to supply shortages and high shipping costs caused by the Russian-Ukrainian war, the spread of the epidemic, and China’s “clearing” policy. 

Mr. Nguyen Chanh Phuong, vice chairman of the Ho Chi Minh City Handicraft and Wood Industry Association (HAWA), said that in the first six months of this year, exports of wood and wood products were still at a high level. However, due to the impact of high inflation in import markets (mainly the US), companies began to face the crisis of insufficient orders.

production furniture 2

Workers of Vietnam Timber Company are producing furniture for export

According to Mr. Nguyen Chanh Phuong, Vietnam's wooden furniture exports are mainly cheap products, which are estimated to account for 70-80% of furniture exports. Inflation in the U.S. is so high that it affects low- and middle-income people, forcing them to tighten spending. As a result, consumption of low-priced items has been severely affected, while high-value items have not lost orders. 

Nguyen Chanh Phuong said: “The U.S. accounts for 60 percent of Vietnam’s export value of wood and wood products, so high inflation in this market has had a major impact on our wood industry as many U.S. importers have reduced their purchases.”

Not only the U.S., but Vietnam’s exports of wood and wood products to some other major markets such as the European Union and South Korea are starting to face hurdles due to inflation. Although some markets have increased imports of Vietnamese wood and wood products, compared with the United States and the European Union, the import volume is still small, which cannot offset the concerns of Vietnamese wood companies about slow consumption in the United States.

Some wood industry experts said that although the export of wooden furniture is facing difficulties, the export of wood pellets and wood chips has grown well. However, since wooden furniture accounts for too much of the total export of wood and wood products, the growth of these commodities will not alleviate the dilemma of wooden furniture exports.

For now, experts remain cautious about the growth in exports of wood and wood products this year. However, due to higher export values ​​in the first half of the year, the total for the full year is likely to be the same or slightly higher than in 2021.

As orders are on a downward trend and no longer influx as before, Vietnamese timber companies are recalculating orders and customer numbers, etc., to achieve optimal productivity, maintain business efficiency and maintain high levels of global inflation with no signs of decline. Market demand.