Vietnam's wood exports showing signs of recovery

According to the General Department of Vietnam Customs, the export of wood and wood products reached 6.1 billion USD within the first six months of 2023, which is a decrease of 28.3% compared to the same period in 2022. Accordingly, the export of wood products reached 4.1 billion USD, which is a decrease of 32.4% compared to the same period in 2022.

Despite the sharp decline, Vietnam's wood industry has exhibited signs of strong recovery. Most notably, the growth rate is gradually improving over the months. Namely, the export of wood and wood products in April 2023 decreased by 32.2% over the same period in 2022. This decrease has dropped to only 24.6% in May 2023 and 23.3% in June 2023. The decline rate in May and June was lower compared to the general growth rate within the first six months of 2023.

On the other hand, many businesses have started placing new orders for wood and wood products. Although there are fewer orders overall and a smaller delivery window, these are promising indicators for Vietnam's wood exports.

According to Mr. Huynh Quang Thanh, former Chairman of Binh Duong province's Wood Processing Association, Vietnam's wood production and export are likely to recover despite the small amount of orders compared to the same period in 2022. Vietnamese businesses operating in the wood industry have actively participated in promotional events such as fairs, which have helped them in obtaining new orders.

An owner of a wood processing plant in Binh Duong province revealed that his company has received multiple orders for wooden furniture with a delivery window ranging from September 2023 to the middle of 2024. Additionally, several other customers have requested quotes and samples for wood products from his company. As a result, he has a positive outlook for the wood industry in 2024. The aforementioned factors have led many to believe that Vietnam's export of wood and wood products will recover quickly in the immediate future.

On the other hand, Vietnamese businesses in the wood industry are confident that the sharp decline in wood exports during the first half of the year was caused by the global economic recession, not by the loss of competitiveness from Vietnamese wood products.

Evidently, Vietnamese wood and wood products continue to be the most popular choice in the majority of key markets around the world. According to statistics compiled by the US International Trade Commission, imports of wooden furniture into the USA market only reached 6.3 billion USD within the first four months of 2023 due to diminishing demand, which resulted in a decrease of 29% over the same period in 2022. The USA's two largest suppliers of wood and wood products, China and Vietnam, had their imports reduced by 46.7% and 28.8%, respectively. Most notably, the decline in wood imports from Vietnam was smaller compared to an overall decline in the USA's imports of wooden furniture.

Consequently, Vietnam continues to be the largest supplier of wooden furniture to the USA market with an export turnover that far exceeds other suppliers. Namely, the USA imported 2.2 billion USD worth of wooden furniture from Vietnam, 977 million USD from China, 597 million USD from Mexico, and so on. Accordingly, Vietnamese wooden furniture still holds the same market share as it did in the first four months of 2022 in the USA's total wooden furniture imports.

According to the Agency of Foreign Trade under the Ministry of Industry and Trade, the main wood products that the USA imports coincide with Vietnam's strengths, such as wooden frame chairs, living room and dining room furniture, wooden furniture, kitchen furniture, and office furniture among many others. Furthermore, these Vietnamese wooden products all boast high import values. Consequently, the high import values demonstrate that Vietnamese wooden furniture products have satisfied the needs of US consumers.

On the other hand, the inventories of wooden furniture importers in major markets such as the EU, the USA, and UK are slowly drained towards the end of the year. As a result, many importers have begun importing to refill their inventories. In addition, freight fees around the world are falling rapidly, which will further promote wooden furniture exports.