VCN - The high price of imported wood materials and the increase in freight rates have been putting great pressure on the wood processing and export industry. Promoting support for businesses and households to plant large timber forests is an important solution to help the whole industry be more proactive in raw materials, towards replacing imported wood sources in the near future.
|Vietnam's wood processing and export industry is dependent on imported raw materials. Photo: N.Thanh|
Shortage of supply, prices increase
According to Do Xuan Lap, Chairman of the Vietnam Timber and Forest Products Association, the wood processing industry is going through great changes. The Covid-19 pandemic and recently the conflict between Russia-Ukraine caused freight rates to skyrocket, and the price of imported wood materials to increase.
Statistics from the General Department of Customs show that, in the first three months of 2022, the price of imported round pine increased by 52%, imported sawn pine increased by 38%, and sawn oak increased by 36% over the same period last year. Besides, the long import time leads to enterprises lacking raw materials and having to slow down production activities. These factors are directly reducing the competitive advantage of the industry.
Nguyen Vinh Quang, an expert of Forest Trends, added that the "picture" of importing raw wood saw many big changes in the first quarter of this year. The price of imported wood from legal sources (Europe, America) increased sharply. For example, the price of pine wood increased sharply from US$91/m3 in early 2021 to US$139/m3 in February 2022, an increase of 52%. For raw wood imported from high-risk areas such as Africa and Cambodia, there are also fluctuations. Specifically, the price of imported ironwood increased from $275/m3 in December 2021 to $561 in March 2022.
“The FSC has stopped all commercial activities related to Russian timber. This means that wood from Russia is considered illegal. In addition, the Russian Government also introduced a ban on the export of logs in response to Western sanctions. As a result of sanctions and retaliatory measures, the supply of timber from Russia has decreased. The lack of a large supply of raw wood is creating competition for raw materials among importing countries, pushing up the price of raw wood," said Nguyen Vinh Quang.
“The problem for the industry today is how Vietnam can proactively source wood as input materials, moving towards replacing imported wood sources, which are currently at 5-6 million m3 per year. How can Vietnam develop a domestic source of wood material that is large, high quality, diverse in species and sustainable? These are urgent issues the industry must solve in the near future if it wants to maintain its competitive advantage,” said Lap.
Need preferential credit policy
According to the Vietnam Timber and Forest Product Association, the Vietnamese Government prioritizes and encourages the development of plantation timber that is large, certified sustainable timber. This has been clearly demonstrated in the "Strategy for development of the forestry sector in the 2020-2030 period with a vision to 2050", as well as in the "Project on sustainable development of the wood processing industry" which has just been approved by the Prime Minister.
However, Lap said that if we look at the actual results of large timber afforestation, especially FSC-certified afforestation, there are still many limitations.
The statistics of the research team of the Timber Associations and Forest Trends show that by the end of March 2022, the total area of planted forests as production forests with FSC certification in Vietnam reached nearly 180,000 hectares, equivalent to about 5% of the total production forest area of Vietnam. The proportion of planted forest timber used for furniture processing is low, accounting for only 30-40% of the total harvested timber; the other 60-70% goes to the industry of chips and pellets.
Nguyen Tien Lam, Chairman of Nghe An Woodworking and Non-timber Forest Products Association, said that the demand of enterprises for timber is very large, but currently, forest plantations in Vietnam cannot meet it.
"In order to solve the problem of the large demand for wood, the State needs to order scientists to research and create high-quality large tree varieties to supply businesses to plant and multiply the area; at the same time, proposed the most efficient process of growing large timber, which can be grown medicinal herbs under the canopy of large trees," Lam suggested.
Do Thi Bach Tuyet, Chairman of the Board of Directors of Woodsland Tuyen Quang Joint Stock Company, said the construction of a large timber plantation area (in the immediate future within the scope of forest certificates granted) is Woodsland's goal and strategy.
Currently, enterprises have cooperated with certificate holders including forestry companies and groups of households to develop a forest management plan for at least seven years in the forest management plan to be able to create a wood material area that meets the requirements of the Government.
However, at present, the maintenance and development of a large wood material area with a plantation cycle of seven years or less of Woodsland still face many difficulties. The main reason is that investment in forest retention is currently very difficult for both forestry companies and households; currently, the quality of seeds is degraded, and pests and diseases are widespread.
Tuyet suggested that the State should have a preferential credit policy for forest growers, and have a mechanism to lend capital to forestry companies and households to plant large timber forests; strictly manage the journey and origin of forest tree varieties before they are put into incubation and sold in the market.
Recognizing that planting large timber forests is very difficult, and developing large timber forests takes from 10 to 15 years, Nguyen Tuan Thanh, Standing Vice Chairman of Binh Dinh Provincial People's Committee, suggested that the State should have mechanisms and policies to support businesses to develop the whole chain from afforestation, purchasing, processing and export.
By Thanh Nguyen/ Huu Tuc