Exports to the US drop resulting in a decline of the growth momentum of wood industry

illustration image. Photo: Nguyễn Thanh

According to statistics from the General Department of Vietnam Customs, the export of wood and wood products in July 2022 reached US$1.3 billion, reduced by 3.1% compared to July 2021. Generally, in the first seven months of 2022, the export value of wood and wood products reached US$9.7 billion, rising by 1.1% over the same period in 2021. In particular, the export value of wood products reached US$6.9 billion, decreasing by 7.5% over the same period in 2021.

According to Mr. Bui Chinh Nghia, Deputy Director General of Forestry (Ministry of Agriculture and Rural Development), the export growth of the whole industry in the first seven months of the year was lower compared to the same period in 2021 and previous years.

The main reason is due to the high price of raw materials and products (the cost of production of materials and transportation increased sharply). The countries tighten credit policies because inflation tends to increase, leading to a sharp decrease in consumer demand.

According to the Import-Export Department (Ministry of Industry and Trade), the United States is the main export market for Vietnam's wood products. In the context of inflation pressure weighing on the US economy, the consumer demand in this country slowed down. When consumer demand in the world's largest economy decreases, it will greatly affect Vietnam's wood exporters.

“Specifically, the export value of wood and wood products to the US market in the first seven months of 2022 reached US$5.56 billion, dropping by 5.6% over the same period in 2021. Exports of wood and wood products to the United States is the main reason for reducing the growth momentum of the wood industry," a representative of the Import-Export Department said.

While exports of wood and wood products to the largest market decreased, the value of exports to markets in Asia grew positively in the first seven months of 2022.

Accordingly, leading is exports to the Chinese market reaching US$1.16 billion, rising by 25.4% over the same period in 2021; next is exports to the Japanese market with US$1 billion, increasing by 23.1%; Korea reached US$602 million, growing by 12.7%; Malaysia reached US$92.1 million, up 38%.

A representative of the Import-Export Department said that wood industry enterprises need to take advantage of free trade agreements (FTAs) that have been signed and taken effect like the Regional Comprehensive Economic Partnership (RCEP), Vietnam - Korea FTA, Vietnam - Japan Economic Partnership Agreement, ASEAN Trade in Goods Agreement to increase exports; diversifying export markets, avoiding dependence on some markets.