The wood sector is reviving, but the pressure of raw material scarcity remains intense

DNHN - Although the wood industry is growing in terms of orders, most businesses are experiencing difficulties due to a lack of raw materials, which prevents them from meeting their production schedules for signed contracts.

In March, the growth rate of the wood industry showed signs of a slight decrease, but it is still a high number compared to 2021. If the average export turnover is kept at about 1.5 billion USD/month, the plan is set out. of the wood, the industry is about 16.5 billion USD by the end of 2022, which is completely feasible. 

Vice-Chairman of the Ho Chi Minh City Handicraft and Woodworking Association (HAWA), Nguyen Chanh Phuong, stated that due to free trade agreements such as the EU-Vietnam Free Trade Agreement (EVFTA) and the Partnership Agreement Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), Vietnamese wood processing industry has been able to easily place orders in a variety of markets, increasing its competitiveness against products from other countries. 

Specifically, wooden furniture products exported to CPTPP markets have increased sharply, led by living room furniture, dining room furniture, followed by bedroom furniture. It is forecasted that the export of wood and wood products to this market segment will continue to increase strongly shortly, because, at present, many businesses are increasing their capacity to keep up with the orders signed by the end of the second quarter of 2022.

Although the wood industry is seeing a positive order flow, the majority of enterprises are under financial strain as a result of the numerous costs paid since the entire country lifted the blockade. Additionally, input materials are expensive, despite the eve though materials used in Vietnam's wood furniture business being domestic. 

According to experts, domestic raw materials play a critical role in avoiding future supply volatility of imported wood. To do this, the government, business community, and afforestation households must work cooperatively. Recently, the Vietnam Wood and Forest Products Association urged the Government that methods and regulations be implemented to support the establishment of vast timber forests. 

Additionally, policy mechanisms should focus on fostering an environment conducive to processing firms investing in planting material areas. Simultaneously, it is vital to foster relationships between businesses and afforestation householdtoin tove a substantial supply of high-quality timber for export processing. 

In addition, mechanisms and policies also need to focus on creating an environment to attract processing enterprises to invest in plantation material areas. Linkages between businesses and afforestation households to create a large source of high-quality timber has the potential to improve the efficiency of land use by households. 

According to Ms Bui Thi Thanh An, Deputy Director of the Trade Promotion Department (Vietrade), Ministry of Industry and Trade, the Trade Promotion Department needs to coordinate with organizations and associations to develop... numerous trade promotion programs, providing opportunities for businesses across the country to access markets, supply, and services.

Huu Chau