Source: Kinhtenongthon.vn
The market is warming up
The Import-Export Department (Ministry of Industry and Trade) said that in September, wood exports to the US gradually recovered, reaching 617 million USD, an increase of 7.5% compared to September 2022. This is also the first month in 9 months of 2023 that wood exports to the US will grow positively.
In the first 9 months of 2023, exports of wood and wood products to the US reached 5.2 billion USD, down 24% compared to the same period in 2022. The level of decrease is tending to narrow as the market’s import demand increases. This has increased in recent months.
Besides the US, wood exports to export markets still recorded negative growth in the first 9 months of 2023, for example Japan reached 1.3 billion USD, down 9%; China reached 1.2 billion USD, down 24.5%; Korea reached 583 million USD, down 21%…
The Import-Export Department believes that recovering wood exports to the US can contribute to promoting better growth for the wood industry in the last months of the year because this is the largest export market of Vietnam’s forest products industry, accounting for 54%. total export turnover of this product.
However, risks in this key market already exist when many Vietnamese products such as kitchen cabinets, plywood, wooden bars… are at risk of being investigated for trade remedies.
During a meeting with Ms. Gina Raimondo, Secretary of the US Department of Commerce at the end of September, Minister of Industry and Trade Nguyen Hong Dien expressed concern at the frequency of trade remedy investigations on US export goods. Vietnam’s entry into the US market is increasing, especially cases targeting Vietnam’s exported industrial products.
The Minister of Industry and Trade proposed that the DOC will consider Vietnam’s opinions in each specific case to ensure trade liberalization, fairness, objectivity, and transparency for trade activities of businesses of the two countries. .
In the same development, Mr. Nguyen Chanh Phuong, Vice Chairman of the Ho Chi Minh City Handicraft and Wood Processing Association (HAWA), shared that businesses in the industry are also receiving more positive interactions from purchasing partners. Some businesses with new orders have begun to organize workers to work overtime again or recruit more workers.
At the same time, increase the import of large amounts of raw wood. The average amount of imported wood increases by 5-10%/month. This is a sign that wood businesses are actively preparing for year-end orders. In the context of great competitive pressure on orders, many businesses are prioritizing investment in machinery, technological innovation, and improving product quality to meet market needs.
In particular, the real estate market in the US is showing the first signs of recovery. Along with that, information from the Vietnam Trade Office in the United Arab Emirates, furniture imports in countries belonging to the Gulf Cooperation Council (GCC) have a growth rate of more than 45%/year, in when countries in this region produce almost no furniture. This is expected to open up more positive prospects for Vietnamese furniture and construction material exporters in the near future.
Improve product quality to suit consumer tastes
It can be said that the challenges of the wood industry from now until the end of the year are huge. In addition to stories of dealing with inflation and tightening consumption, there are also cases related to trade defense measures. Especially trade defense measures from the United States, the main export market of Vietnamese wooden furniture.
Therefore, the Ministry of Agriculture and Rural Development believes that in the long term, it is necessary to ensure thorough compliance with international market regulations, especially regarding the origin and legality of wood materials.
Accordingly, Vietnamese wood businesses will face new requirements such as the Carbon Border Adjustment Mechanism (CBAM) proposed by the European Commission, effective from October 2023. Goods imported to the European market will incur additional costs if they do not convert to a production model with less emissions to get carbon credits.
Therefore, according to Mr. Pham Phu Ngoc Trai, green transformation right now is the way to have the opportunity to improve competitiveness. “If good connections are re-established and organized, the carbon credit market is an opportunity for Vietnamese furniture industry enterprises to increase their advantages. Vietnam’s wood processing industry needs to reposition its goals and vision to become green and sustainable world furniture center” – Mr. Trai advised.
With the problem of inflation, most Americans spend on credit (buy things first, and pay later). Therefore, rising interest rates will force people to tighten spending, especially for items that are not considered essential such as wooden furniture.
However, 64% of respondents said they are still willing to spend more money on items that are of good quality, durable, good for health and environmentally friendly, instead of spending money on items that are of good quality, durable, good for health and environmentally friendly. has a “seasonal” nature like before.
Therefore, the story for Vietnamese furniture manufacturers is that they need to improve product quality to suit consumer tastes; Besides, it also needs to be diverse in types and designs to suit different customer classes.
Commenting on the above issue, Mr. Do Xuan Lap, Chairman of Vifores, said that the high-end wooden furniture segment is currently not given much attention by businesses. If participating in this market, it will bring huge export value. . To participate in this market, businesses must have a brand, meet design standards, technology solutions, and have the ability to design new products…
Therefore, the wood and furniture industry needs to focus on investing in automation to help increase production efficiency and product quality. Automation not only in the factory but throughout the supply chain to meet the increasing demands of the market.
Notably, most recently, in new markets such as India, the Middle East…, the export value of wood and wood products to the Indian market recorded a strong growth rate in the first 8 months of 2023, reached 64.9 million USD, an increase of 265.8% over the same period in 2022.
From the above reality, in the coming time, to solve problems for the wood industry, representative agencies will continue to make efforts to support the wood industry to expand and diversify markets, especially potential markets with room such as: India, Eastern Europe, Middle East; Closely coordinate with businesses to improve the effectiveness of preventing and adequately resolving disputes and trade remedies, protecting the legitimate rights and interests of Vietnamese businesses…
