According to a report from the Ministry of Agriculture and Rural Development, in January 2024, the United States, China, Japan, and South Korea are the four main export markets, accounting for 85% of the total export turnover of the wood industry in Vietnam.
BRIGHT SPOTS IN THE NETHERLANDS, OPTIMISM FROM THE UNITED STATES AND EU
Notably, in the European market (EU), there was a “bright spot” in the first month of 2024, which is the export of wood and wood products from Vietnam to the Netherlands nearly doubled compared to the same period in 2023. According to the General Department of Customs, in January 2024, the export of wood and wood products from Vietnam to the Netherlands reached approximately $9.2 million, increased by 5.1% compared to December 2023 and increased by 93.8% compared to January 2023.
Explaining this “phenomenon,” some wood industry experts said that due to a shortage of imported fuel from Russia, the Netherlands has a demand to increase imports of compressed wood from many countries, including Vietnam. The Netherlands is currently one of the major wood import markets of Vietnam in the EU. However, the Netherlands is also a demanding market with many regulations and high standards for goods. Therefore, to boost wood and wood product exports to this market, meeting the standards is of paramount importance.
Regarding the US market, Mr. Nguyen Ngoc Huong, Deputy Director of Kim Gia Company (a wood veneer exporting company with growth in 2023), commented that despite high inflation and tightened consumer spending, this market still contains many development opportunities. In 2023, unlike focusing on a low-price strategy like many other businesses, Kim Gia actively approached customers to develop suitable products and target customers.
“In the US market, buyers are still buying veneer made from Beechwood at prices of $360 or $370 per ton, but what’s important is to find the end customers and avoid going through Chinese trade to increase profits. These factors are calculated and carefully considered to help Kim Gia make decisions to “attack” the two markets of California and New York in the US,” shared Mr. Huong.
“For the EU market, wood exports to the EU have been greatly narrowed in 2023. But the volume of exports of wood products to the EU will show clear signs of recovery in 2024, when customers from the EU seek alternative sources to replace supplies from Russia and China, it will help Vietnamese veneer have the opportunity to grow strongly again.”
Mr. Nguyen Ngoc Huong, Deputy Director of Kim Gia Company.
For California, this is a place where real estate projects try to reduce investment costs for interior wood furniture, so Kim Gia’s veneer products made from beechwood bring advantages in terms of price and quality compared to veneer made from Beechwood. For film-coated veneer products, the New York market has many opportunities as well. The characteristic of this market is quite large when project investors or residents changing houses have a habit to replace all the interior furniture, so it creates many opportunities for Kim Gia to exploit.
COOLING TRANSPORTATION RATES, ENTERPRISES HAVE MORE HOPE
In January 2024, wood export businesses were extremely worried about the tension in the Red Sea, causing freight rates to increase significantly. However, up to now, freight rates for goods transportation to the EU and the US have shown signs of cooling, entering the third consecutive week of decline. This brings hope to many wood export companies.
In a recent interview with Nikkei Asia, Mr. Philip Damas, Managing Director of maritime research and consulting company Drewry, said that the worst is over, export companies will be easier to control and organize. At the same time, spot freight rates will decrease sharply after the shock increase in the initial period.
According to Mr. Do Xuan Lap, Chairman of the Vietnam Timber and Forest Product Association (VIFOREST), currently the freight rate for a 40-foot container from Vietnam to Europe is only $3,786, still high compared to previous years but has decreased compared to January 2024. Currently, VIFOREST closely monitors fluctuations in goods transportation worldwide, regularly updates the situation to businesses in the industry, advises businesses to proactively plan the production and import-export of wood and wood products to minimize impacts.
Regarding the export situation of the forestry sector in 2024, Mr. Lap said that with strong growth results in the first month of the year, along with the current favorable conditions, our sector strives to achieve a total export turnover of $17.5 billion, of which wood and wood products reach $16 billion, an increase of 20% compared to 2023…”
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