Control imported wood to help development of the wood industry

	China put capital into the wood industry, worry about illegal investment from it
	Wood industry connects with the world market through the internet
	Wood export has high growth during the pandemic

The whole forest products industry aims to export over US$14 billion in 2021. Photo: N.Thanh

Closely monitoring the activities of enterprises showing signs of fraud in importing from the Chinese market in particular, enhancing control, ensuring legal wood imports from other markets in general arethe key points to promote wood processing and export growth in the future.

Reduce import of raw materials, increase product imports

The report titled "Foreign Direct Investment in the Vietnamese Wood Industry: Current Situation of 2020 and Development Trends is a Product of Cooperation" by a research team including the Forest Trends Organization, Vietnam Timber and Forest Products Association (VIFOREST), HCMC Association of Handicraft and Wood Processing (HAWA), Wood Processing Association of Binh Duong Province (BIFA) and BinhDinh Timber and Forest Product Association (FPA BinhDinh) has just been announced.

In particular, the issue of importing wood and wood products of Vietnam attracted a lot of attention with careful analysis in moving imported products.

Specifically, in 2020, the value of wood imports reached US$2.55 billion, which remained stable compared to 2019. The five main wood supply markets for Vietnam include China, the US, Cameroon, Thailand and Chile. Import value from these five markets reached US$1.57 billion, accounting for over 61% of the total import value from all markets. Regarding the import categories, the types of input materials for the production of wood products such as logs, sawn timber, and artificial boards are still the main products imported by Vietnam. However, in addition to these main input materials, items such as seats and furniture parts are groups of high import value.

Mr. ToXuanPhuc, Forest Trends Organization Expert,said the import of furniture in general (HS 9403) increased rapidly in 2020, reaching US$187.96 million, up to 51% compared to 2019. Notably, imports of furniture parts (HS 9403.90) increased rapidly by 97% in terms of import value, reaching over US$146.57 million. Up to 84% of the value of furniture parts are imported from China.

A new item imported in 2020, which attracts great attention, is plywood which has been cut into a shape for the frame and bottom of asofa. In 2020, Vietnam imported over 10,380 m3 of this product. Importing semi-processed plywood from China will reduce the processing stages in Vietnam, this item is 100% imported from China.

“In 2020, the wood industry still maintains the same value of import as inprevious years. However, the group of raw material wood, which is the main imported products, such as logs and sawn timber, continued to decline. While the group of boards of all kinds still grew strongly, especially the group of furniture and seats increased rapidly. They show signs of origin evading risks for this group of goods imported into Vietnam from China,” Mr. ToXuanPhucsaid.

In fact, although Covid-19 has spread throughout most countries in the world with many ongoing waves of outbreaks, over the past year, wood and wood products belonging to Vietnam's main export groups have shown goodperformance and a level of high growth. The US is still the largest consumer of Vietnamese wood products and has a very high growth rate. Some economists said that the export of wood products to the US is on the rise, while imports of wood and wood products from China have also increased at a high rate, which has placed Vietnamese wood exports in the face of many risks, includingtrade defense lawsuits.

Ensure legal wood imports

The research team assessed that the risk of origin evasion for some groups of goods imported from China is very high. This risk is currently havingnegative impacts on the image and reputation of the industry in the international sphere. The recommendation is that the management agencies andbusiness community cooperate with partners to continue to closely monitor the situation and come up with feasible and more effective measures to detect and eliminate commercial fraud, evade origin from the production stages of the enterprise to the local authorities throughout the supply chain of the wood industry.

"Local associations continue to closely monitor and supervise activities of enterprises showing signs of fraud, coordinate with localities with the Central Association to orient and propose solutions to prevent this,”said To XuanPhuc.

Regarding wood processing and exporting, the Standing Deputy Minister of Agriculture and Rural Development Ha Cong Tuan said that in 2021, this industry set a target of exporting over US$14 billion. This is a viable target, but the resource issue must be addressed.

Accordingly, domestic wood material sources need to accelerate certification of sustainable forest management. Importing wood material needs to be strictly controlled to ensure the legal origin.Enterprises must promote the application of digital technology on a larger scale, set up digital market programs to connect with the world and immediately connect domestic enterprises; continue to apply digital technology in managing and monitoring the whole production chain and cycle as well as applying new achievements in automation in direct operation and production.

Regarding the source of wood imported from tropical countries, in order to limit the risks, Mr. To XuanPhuc said the Government and wood associations should require all tropical countries supplying timber to Vietnam to have sufficient basic information about the mechanisms and policies of harvesting, processing, trade, and characteristics of the types of timber that are allowed and not allowed to be harvested, used and commercialized in this country.

In addition, Vietnam's forestry research institutions need to coordinate with forestry research institutions in countries that are the source of raw wood for Vietnam in Africa, to provide a list of imported wood types and characteristics of the form of each species. The list should be disseminated in the system of managers, craft villages and importers.