Currently, many enterprises in the wood industry have received orders for export to the EU by the end of the third quarter of 2022 and are continuing to receive orders in the fourth quarter of 2022. Exports of wood and wood products, especially wooden furniture, to the EU market are expected to be favorable in the coming time.
Wood export to the EU increased in the first quarter of 2022
According to the General Department of Customs, it is estimated that in March 2022, Vietnam’s export turnover of wood and wood products to the EU reached 71.3 million USD. This figure is up 0.4% compared to March 2021. In the first three months of the year, exports of wood and wood products to the EU reached about 198.6 million USD, up 6.1% compared to the same period in 2021.
Many enterprises in the wood industry are continuing to receive orders in quarter IV.
Most of the items in the structure of wooden furniture exported to the EU had an increase in turnover in the first two months of 2022, except for office furniture. The wood furniture group includes high value-added products, so enterprises are focused on promoting the export of this group to the EU market. Despite the complicated pandemic and geopolitical tensions, exports of wood and wood products to the EU increased quite rapidly in the first months of the year. In particular, in the first two months of 2022, wooden furniture is the main export group to this market reaching 104.3 million USD, up 5.3% compared to the same period in 2021, accounting for 82% of the total export of wood and wood products.
Besides, in the first two months of 2022, wood, wooden boards, and floorboards, handicrafts, mirror frames exported to the EU increased strongly compared to the same period in 2021. Exports of wood and wood products to the EU grow positively as purchasing power in this market is recovering well. In particular, the wooden furniture group is on a strong upward trend.
In the export market structure, Germany has always been Vietnam’s main export market for wood and wood products in the EU. In the first two months of 2022, the export turnover to the German reached 27 million USD, up 5.5% compared to the same period in 2021. Notably, in the first two months of 2022, exports of wood and wood products to the Belgian accounted for 10.2% of the total export turnover to the EU. The growth rate in this market is at a high level.
Opportunities to expand market share
According to the European Statistical Office, in 2021 EU imports of wooden furniture reached 8.6 million tonnes, worth 22.6 million Eur (equivalent to 25.3 million USD). This figure is up 23.4% in volume and 19.2% in value compared to 2020. In particular, the EU imports from Vietnam reached 136.4 thousand tonnes, worth 492.5 million Eur (equivalent to 551.6 million USD), up 3.6% in volume, and 14.7% in value compared to 2020.
The proportion of wooden furniture imports from Vietnam only accounted for 2% of total EU imports in 2021, which is still very low compared to the EU’s import demand. Therefore, Vietnamese enterprises have many opportunities to expand their market share in this market.
According to industry experts, the export of wood and wood products, especially wooden furniture, to the EU is considered to be favorable in the coming time. The first opportunity comes when China, the leading country in wood and wood products exported to the EU, is still implementing the “Zero Covid” policy. Accordingly, China is applying strict methods to control the pandemic, so its production and export activities are interrupted.
Besides, increasing foreign investment in Vietnam with the initiative in production technology and input of wood materials will be the motivation for the wood processing and export. Therefore, enterprises need to take full advantage of these opportunities to increase their market share in the EU.
Along with this, the Free Trade Agreement between the EU and Vietnam (EVFTA) is having a favorable impact on Vietnam’s wood industry. It creates a competitive advantage for wood products when the tariff is gradually reduced to 0%. This will also attract investment from the EU into Vietnam.
Mr. Tran Thanh Hai, Deputy Director of the Export-Import Department (Ministry of Industry and Trade), commented that Vietnam has successively had large-scale FTAs with deep commitments such as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), EVFTA, FTA Vietnam – United Kingdom (UKVFTA), most recently the Regional Comprehensive Economic Partnership Agreement (RCEP). These are all FTAs with Vietnam’s very large-scale trading partners, which have had significant effects.
Exports of wood and wood products, especially wooden furniture, to the EU market are expected to be favorable in the coming time.
Ms. Duong Thi Minh Tue, Business Director of Minh Duong Wood Company, said:
“Although the orders of our company are full until the end of the third quarter of 2022, we are still receiving orders for the fourth quarter. However, logistics costs are rising rapidly, so the prices of products are very high. Many orders are booked before the fluctuations in raw material prices, so the profits are reduced.”
Experts say that there are many opportunities to boost exports of wood and wood products to the EU. However, the complicated pandemic and recent changes in global politics are affecting the supply chain, raw material supply, and logistics costs. This will prevent the growth of the wood sector in the EU in the coming time.
Mr. Olivier Richard, Director of Richard Négo Bois Company – a leading raw material wood supply company in France, said that with the shortage of goods and the high price of wood now, producers need to catch the opportunity when signing raw material import orders. At the same time, enterprises should also consider the option of switching the type of wood used to reduce the price pressure.
Mr. Olivier Richard also recommends: “Eucalyptus, for example, is used by many Indonesian companies to produce wooden furniture for export to the EU. Currently, the price of eucalyptus wood in Vietnam is being pushed up, so many Vietnamese enterprises are hesitant. Advice for them is to look further, ”.
Meanwhile, Mr. Do Xuan Lap, President of the Vietnam Timber and Forest Product Association, said that using wood from domestic raw materials is also a question that enterprises need to consider in the coming time to reduce their dependence on import sources.
Vietnam’s wood processing and furniture industry have much potential to improve the export turnover and share in the total value of global wood and furniture consumption in general and the EU in particular. According to experts, to effectively exploit those potentials, the industry should quickly upgrade, improve each stage and promote the linkage in the supply chain. At the same time, they need to invest properly in branding activities, and promoting products to domestic and foreign consumers.