Inflation in the US and the EU remains at a high level and the real estate market is also in a quiet period, which are the main reasons why wood exports, especially Vietnam’s wood furniture to these two key markets will be unlikely to recover in the near future.
Regarding the export market for wood and forest products in 2023, experts said that the stability level in three important East Asian markets of Vietnam’s wood industry, including China, Japan, and South Korea is much higher than in the US and EU markets. However, export items to these East Asian markets are relatively narrow, just wood chips, pellets, plywood, and some others. Meanwhile, the key market for wood exports, especially wood furniture, is the US and the EU.
WOOD EXPORTS TO THE EU AND US DROPPED SHARPLY
Wood exports decline sharply in the first quarter of 2023.
According to data from the General Department of Customs, in the first quarter of 2023, the export value of wood products is estimated at 1.87 billion USD, down 38.5% over the same period in 2022. Wood furniture accounted for 56.5% of the total export value of wood and wood products, down 11.5 percentage points compared to the same period in 2022.
In terms of market, bedroom furniture is the most exported to the US market, with the proportion accounting for 76.6% of the total export turnover of this item in the first quarter of 2023. However, due to the impact of inflation, the export of this item to the US market has decreased by 51.1% over the same period in 2022.
For the EU market, in the first 03 months of 2023, the export value of wood and wood products only reached 133.2 million USD, down 37.1% over the same period in 2022.
At the seminar “Trends and potentials of wood furniture export to the EU – US market” recently held by the Trade and Investment Promotion Center of HCM City, experts said that inflation in Vietnam’s main export markets such as the US and the EU is high. This limits spending on non-essential items. These countries are trying to control but there is no sign of inflation going down in the short term.
In 2023, the EU economy is forecast to grow only 0.5% compared to the 2% growth rate of 2022, inflation is still high at about 7%. This continues to affect consumer demand, at the same time, makes it difficult for countries to export goods to the EU.
In addition, the real estate industry in the EU and US markets is in a quiet period. Exports of bedroom furniture, living room furniture, and office furniture all depend greatly on the operation of this industry. Up to now, the real estate industry has not shown any signs of improvement. Accordingly, it is expected that in the short term, the export turnover of furniture will continue to decrease.
Although exporters to the EU benefit from the new generation of free trade agreements (FTAs), technical standards, and requirements to prove the origin of wood, etc set by the EU are not easy to pass.
For the US market, experts said import demand and inventory at the end of the year have not improved, in many large contracts, partners only pay after full delivery. Therefore, in the short term, Vietnam’s furniture exports to the US are unlikely to grow. Along with that, there are a series of difficulties faced by wood enterprises such as the US monetary policy, high inflation, high logistics transport costs, and regulations of the federal government, especially in quarantine and labor standards./.