What challenges is Vietnam's timber industry facing?

DNHN - In 2023, Vietnam's timber export industry is facing a significant challenge, with an estimated export turnover of only $13.5-14 billion, a sharp decrease of about 14-16% compared to 2022.

Mr Do Xuan Lap, Chairman of the Vietnam Timber and Forest Products Association (Viforest), explained that the main reason is the shrinking demand in key markets such as the US and the EU, leading to a reduction in orders and forcing many businesses to scale back production or even close down.

According to statistics from the General Department of Customs, the export turnover of timber in the first 11 months of 2023 reached $12.1 billion, equivalent to 82.5% of the same period in 2022. The turnover from major markets decreased sharply by about 20-30%, especially from the US and the EU. The Viforest Chairman noted that if exports continue to follow the current trend, the timber industry could face a decline of up to 14-16% compared to the previous year.

Mr Nguyen Liem, Chairman of Lam Viet Joint Stock Company, said that although the company's exports only reached 80% compared to 2022, this is still considered a relatively positive result in the context of difficulties when many other businesses only achieved 50-60% of their export targets.

Despite signs of recovery, the timber industry market cannot yet expect a significant rebound. It is estimated that businesses in the industry will continue to face many difficulties until at least the first half of 2024.

In addition to market challenges, the timber industry is also facing major issues related to the legality and sustainability of its products. The EU's anti-deforestation regulation, which took effect in June 2023, sets high requirements for legality, zero deforestation, and low carbon emissions.

Mr Do Xuan Lap of Viforest shared that Vietnam is importing a large amount of timber from tropical countries, an increase of 40% compared to the total output, which poses risks in terms of legal issues and the loss of opportunities to use safe domestic timber sources.

Mr To Xuan Phuc, Executive Director of the Forest Policy, Trade, and Finance Programme at Forest Trends, warned that the EU's anti-deforestation regulation will affect Vietnam's export turnover to this market. The specific requirements of this regulation pose significant challenges, requiring a focus on policy and infrastructure to prove the origin and legality of timber products exported from Vietnam.

Bich Phuong