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Exports of timber and wood products have fallen sharply due to the impact of the Covid-19 epidemic in Vietnam

Exports of timber and wood products have fallen sharply due to the impact of the Covid-19 epidemic in Vietnam

Thursday 11, 06 2020
The COVID-19 pandemic is leaving very serious consequences for the timber market activities in Vietnam

General situation until June 2020

It is estimated that in May 2020, the export turnover of wood and wood products will reach $750 million, down 17.4% compared to May 2019. In which, the export of wooden products is estimated at $500 million, down 20.5% compared to May 2019.

Generally, in the first 5 months of 2020, the export turnover of wood and wood products is estimated to reach $4 billion, up slightly from the same period in 2019. Of which, the export turnover of wood products is estimated at $2.8 billion, down 2.9% over the same period in 2019. Thus, May 2020 is the second consecutive month that Vietnam's exports of timber and wood products have dropped sharply compared to the same period in 2019 due to the impact of the Covid-19 pandemic. According to the General Department of Customs, in April 2020, Vietnam's export turnover of timber and wood products reached $ 697.1 million, down 29.3% compared to March 2020 and down 18.7% compared to April 2019. In particular, the export of wooden products reached $434 million, down 26.8% compared to April 2019. In the first 4 months of 2020, the export of wood and wood products of the whole country reached  $3.29 billion, up 5.1% over the same period in 2019; Export of wooden products reached $2.27 billion, up 2% over the same period in 2019. It can be seen that, in 2019, the export turnover of the wood industry is still on the rise, reaching over 10.3 billion USD.

The US, Japan, China, South Korea, and EU continue to be the five most important markets of Vietnam with turnover from 5 markets reaching $9.3 billion (accounting for 90% of total turnover). Among these markets, the US is the largest market, having imported up to $5.1 billion of wood products from Vietnam. However, due to the impact of the COVID 19 epidemic, as of April 2020, the export of wood products to these 5 markets decreased sharply, specifically:

  • Exports to the US and Europe, Canada, Australia ... plummeted. Although the US is still the largest export market for Vietnam's timber and wood products, its export turnover to this market in April 2020 decreased by 37.3% compared to March 2020 and decreased by 22.1% compared to April 2019, reaching 300.89 million USD. Generally for the first 4 months of 2020, exports of wood and wood products to the US still increased by 12.5% ​​over the same period in 2019, reaching $1.6 billion. 

  • Exports of wood and wood products to Japan and South Korea markets in April 2020 decreased compared to March 2020 but still increased compared to April 2019.

  • The export of wood and wood products to the EU in April 2020 decreased by 43.9% compared to March 2020 and by 38.9% compared to April 2019, to $29.7 million. Generally for the first 4 months of 2020, exports of wood and wood products to the EU reached $188.87 million, down 13.4% over the same period in 2019.

  • For the Chinese market, this can be considered as one of the biggest losses to the wood market in Vietnam. Wood chips are the most important item exported from Vietnam to China with a turnover of $972.2 million in 2019, accounting for 79.2% of the total export turnover of all items. The Covid-19 pandemic is causing Chinese companies to produce pulp and paper out of operation or in moderation. This is and will continue to cause a delay in the export of Vietnamese chips to this market. Not only that, but the Chinese Government has also decided to stop unloading at some ports and strengthen strict inspection measures for means of transporting and unloading goods, including goods transported by ships and freight. This continues to make it difficult for wood chip exports from Vietnam. The planks are the most important commodity group imported from China to Vietnam with a value of $395.5 million in 2019, accounting for 60% of the total value of items imported from China to Vietnam. The Covid-19 pandemic is causing this supply to stop. The volume of imported goods previously can help Vietnamese enterprises only have enough raw materials from this source within 1-2 months. Facing the risk of production stagnation as a consequence of this problem.

The COVID-19 pandemic is leaving very serious consequences for the timber market activities in Vietnam

Strengthen technology application, focusing on the domestic market

According to HAWA Vice Chairman - Nguyen Chanh Phuong, wood enterprises have been looking forward to the Vietnam International Furniture and Home Accessories Fair (VIFA Expo 2020), one of the biggest spring trade events in year of the wood industry. They expect the introduction of product models at the fair will help boost sales to domestic customers, partly offset the decline in orders due to export markets narrowing due to widespread disease, on the other hand. introducing new models and business ideas for 2020 to introduce at international exhibitions, preparing for export recovery when partners in the US and EU markets recover after the epidemic. However, the VIFA Expo 2020 was suspended due to the Covid-19 pandemic and there was no deadline to reorganize. “In the context of this slowdown, we are considering many alternatives, including the possibility to switch to online trade fairs to soon introduce new designs to customers in countries and export partners, ”Mr. Phuong said.

While the COVID-19 pandemic is well controlled in Vietnam and the business is allowed by the government, businesses are stepping up the application of technology in all product distribution and care areas. customer. They argue that strengthening online trading applications is a viable way to get rid of deadlock for businesses during the pandemic.

The Covid-19 pandemic caused furniture businesses to suffer from both material and export. Even the big showrooms of the business have been empty since the beginning of the year. The company now strengthens training, customer care, technology, product quality, and environment, and focuses on a number of key products that are the company's strengths to bring online transactions. , introducing models and ideas to customers, especially domestic customers. Under current conditions, technology application in sales and distribution of products is an important factor. Customers can buy directly, view products, design directly online in every corner. When customers choose any of our products, technology software will introduce all the company's products with full information such as color, price, design, size, installation instructions, promotion. trade, incentives ... If the technology application in product distribution is well done, customers can still buy products from normal businesses, so that the timber market can recover in the shortest possible time.

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Vietnam’s timber industry: wood exporters suffering heavy loss

Complied by Vietnam Credit

 
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