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Vietnam’s wood industry: Exports expectation for 2023

Vietnam’s wood industry: Exports expectation for 2023

Friday 27, 01 2023
Vietnam's wood industry has set a target to export 18 billion USD worth of products in 2023. However, this target may be hindered by various challenges.

Vietnam’s wood market under pressure

At the Annual Conference of the Ministry of Agriculture and Rural Development, Mr. Do Xuan Lap, Chairman of the Vietnam Timber and Forest Products Association (Viforest), assessed that Vietnam’s wood industry might be under pressure until the end of the first quarter of 2023. He stated that in 2022, the wood industry's growth rate reached 7.1%. That was considered the most difficult year ever for the wood industry. The growth of the industry is mainly driven by markets such as Northeast Asia, Oceania, Korea, Japan, etc.

Vietnamcredit Ministry of Agriculture and Rural Development

Mr. Lap said that in the second half of 2022, Vietnam's wood processing and export industry faced difficulties due to a lack of capital and input materials, high prices, and the product consumption market being affected. “Previously, at the end of the year, most wood businesses were very busy, working overtime and overtime to keep up with orders to export to Europe and prepare orders for next year. However, this year, there is a lot of inventory in the wood industry. So far, many businesses have not signed any export contracts for 2023, leading to moderate production," said Mr. Lap.

In 2022, Vietnam's wood industry's turnover reached 16.928 billion USD, with deep-processed products accounting for just over half. The reason is that the two main import markets for this product, the United States and the EU, almost stood still during the last 3 quarters of 2022. Vietnam's wood industry almost only took advantage of the opportunity in the first quarter of 2022, thanks to the old orders from 2021.

According to Mr. Do Xuan Lap, from now until the end of the first quarter of 2023, the wood market may still be under pressure to reduce consumption by about 50%. If all goes well, the basic inventory will be sold out by the end of the first quarter. Deeply processed wood products, such as tables, chairs, cabinets, etc., can re-enter primary markets.

Expect to export 18 billion USD

It is expected that by the second quarter of 2023, basic orders will be restored, reaching about 82–85%. That is considered the starting point of the new year. In 2023, the wood industry is anticipated to achieve a growth rate of 7-9%, equivalent to 18 billion USD or more.

Vietnamcredit wood industry

The target is set in the context of China reopening its borders. However, the Vietnam Timber and Forest Products Association also forecast that difficulties will still be presented to the wood production and export industry until mid-2023.

Mr. Vu Tien Thap, Chairman of the Board of Directors of D'Furni Furniture Joint Stock Company, previously acknowledged that the enterprise's current inventory is full of high-priced goods, while prices in the US and other Western countries are falling. Inflation, rising interest rates, and the freezing of the real estate industry have led to abundant inventory at retailers, causing Vietnamese manufacturers to temporarily have no or few orders for the first 6 months of 2023.

Commenting on the export situation of wood and wood products in 2023, Mr. Nguyen Chanh Phuong, Vice Chairman of the Ho Chi Minh City Handicraft and Wood Industry Association (Hawa), said that at the beginning of the year, there would not be much growth, but businesses in the wood industry are expecting to have more orders by March-April 2023, after the first fair of the year.

The Ho Chi Minh City Handicraft and Wood Industry Association is also trying to make HawaExpo fair at the end of February 2023, hoping that this fair will help wood businesses start to get goods, hoping that the world's inflation will be under control.

Vietnamcredit Asian market

Finding new markets closer to Vietnam, such as the Asian market, is also a solution that many businesses are aggressively implementing in the context of the current price of production materials and the sharp increase in transportation costs. In addition, markets such as Australia, Canada, and the Middle East are also being evaluated as very potential areas for Vietnam's wood industry.


Compiled by VietnamCredit

Tags: Vietnam industries, Vietnam companies, Vietnam wood industry, wood exports, exports target

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