Vietnam’s wooden furniture exports have fallen!

Vietnam’s wooden furniture exports have fallen!

2022-07-13

In the first few months of this year, Vietnam’s exports of wood and wood products grew strongly. In January alone, the total export volume reached US $1.55 billion, a year-on-year increase of 14.3%. Except for February (affected by Vietnam’s New Year holiday), exports of similar products reached a high of US $1.3 billion to nearly US $1.6 billion in the first five months of this year. The total timber exports in the first five months are expected to reach about US $7billion, an increase of 4.6% over the same period last year.

However, the export volume has shown a downward trend in recent months. According to the calculation of the General Department of Customs of Vietnam, the growth rate of timber and wood products exports to the U.S. market slowed down in March, down 5.9% compared with last March; In May, the total export volume of wood and wood products was 1.38 billion US dollars, down 4.1% from May 2021; In the first half of June, the total export volume was about 661million US dollars, down nearly 100million US dollars from the same period last year.

According to the import export department under the Ministry of industry and trade of Vietnam, the slowdown in exports is due to high inflation in many major export markets, prompting consumers to tighten spending. In addition, the prices of commodities, raw materials and imported materials required for the production of products have also risen sharply due to the supply shortage and high transportation costs caused by the Russian Ukrainian war, the spread of the epidemic and China’s “zero clearing” policy.

Nguyen CHANH Phuong, vice chairman of the Ho Chi Minh handicraft and Wood Industry Association (Hawa), said that the export of wood and wood products was still at a high level in the first six months of this year. However, due to the impact of high inflation in the import market (mainly the United States), enterprises began to face the crisis of insufficient orders.

According to Mr. Nguyen CHANH Phuong, Vietnam’s wooden furniture exports are mainly cheap products, accounting for an estimated 70-80% of furniture exports. Inflation in the United States is so high that it affects low – and middle-income people and forces them to tighten spending. Therefore, the consumption of low-priced goods has been seriously affected, while high-value goods have not lost orders.

Nguyen CHANH Phuong said, “the United States accounts for 60% of Vietnam’s export value of wood and wood products, so the high inflation in this market has a significant impact on China’s wood industry, because many American importers have reduced their purchases.”

Not only the United States, Vietnam’s exports of wood and wood products to other major markets such as the European Union and South Korea have also begun to face obstacles due to inflation. Although some markets have increased the import volume of Vietnamese timber and wood products, compared with the United States and the European Union, the import volume is still small, which cannot offset the concerns of Vietnamese timber enterprises about the slow consumption of the United States.

Some experts in the wood industry said that although the export of wooden furniture was facing difficulties, the export of sawdust particles and chips grew well. However, due to the large proportion of wooden furniture in the total exports of wood and wood products, the growth of these commodities cannot alleviate the plight of wooden furniture exports.

At present, experts are still cautious about the growth of timber and wood products exports this year. However, due to the high export volume in the first half of the year, the total amount of the whole year may be equal to or slightly higher than that in 2021.

Due to the declining trend of orders and the fact that they are no longer pouring in in large quantities as before, Vietnamese timber enterprises are recalculating the number of orders and customers, so as to achieve the best productivity and maintain business efficiency and market demand under the condition of high global inflation and no signs of decline.

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