Vietnam’s Ministry of Industry and Trade recently issued its Trade Information newsletter on July 1, outlining specific trade data on wooden products and handicrafts.
In preparation for the 5th Smart Furniture Solutions (SFS) Vietnam exhibition, scheduled for November 27-30, 2024, in Binh Duong Province, the event organizers have compiled and highlighted key trends in Vietnam wood and wood products sector for attendees.
Vietnam’s Import and Export Economy Overview
Currently, Vietnam’s economy remains robust, with active import and export activities. Double-digit growth is projected for the second half of the year.
In June 2024, Vietnam’s total trade volume is estimated at US$65.7 billion, a rise of 11.6% from June 2023. Exports are expected to reach $33.2 billion, marking a 10.9% year-over-year increase, while imports are projected at $32.5 billion, a 21.9% rise.
In the first six months of 2024, Vietnam’s total trade volume is forecasted at $369.64 billion, a 16% increase over the same period in 2023. The country’s export value reached $189.48 billion, up 14.2%, setting a new record.
Exports from Vietnam’s domestic economic sector are expected to hit $52.74 billion, a 19.2% increase, raising the sector’s share of total exports to 27.8%, up from 26.7% in 2023. Conversely, foreign-invested enterprises’ share fell to 72.2%. Rising exports have also boosted demand for imported raw materials, which grew 18.1%, reaching $180.16 billion. The country maintained a trade surplus of $9.31 billion in the first half of the year.
Given improving global trade dynamics, Vietnam’s exports are projected to keep growing, with orders expected to spike towards the year’s end. Additionally, rising raw material imports hint at continued export expansion and broader economic growth. The International Monetary Fund (IMF) forecasts Vietnam’s economic growth to reach 6% in 2024, driven by strong international demand and stable foreign investment.
Vietnam Wood and Wood Products Export Overview
In June 2024, Vietnam wood and wood products exports reached $1.25 billion, a slight 1.1% decrease from May but up 13.6% year-over-year. Wood product exports alone are estimated at $840 million, up 10.4% from June 2023.
For the first six months of 2024, wood and wood products exports are projected to hit $7.4 billion, up 22.2% from the same period in 2023, with wood products reaching $5.03 billion, up 21.4%.
Between June 18-25, wood and wood products exports totaled $361.8 million, a 12.3% week-over-week increase. Wooden furniture exports rose 14.3% to $217 million. With positive first-half data, it is anticipated that wood exports will maintain double-digit growth throughout 2024.
Numerous Vietnamese firms have secured orders until August, with some booked through the year’s end. Rising demand in the latter half of 2024 is expected, as real estate development and home renovations drive the need for wooden furniture.
Vietnam wood and wood products industry boasts skilled labor, abundant legal timber, and traceable product origins. Coupled with increasingly diverse designs, the industry is well-positioned to meet global market demands.
However, challenges remain. Geopolitical tensions have led to higher shipping costs, and trade defense investigations in key markets like the US and EU continue to impose pressures related to environmental standards and sustainability.
Starting in late 2024, Europe will enforce forest degradation prevention laws, and the US will increase anti-dumping regulations and inspections on products like kitchen cabinets. Additionally, many Vietnamese firms still rely on low-cost labor and foreign design inputs, limiting product value. Small-scale companies often lack brand recognition and market resilience, while distribution is primarily controlled by foreign partners.
To build a sustainable wood industry, Vietnam must invest in design innovation and increase product value while adhering to environmental regulations. Expanding into underdeveloped markets like the Middle East, Africa, and Northern Europe will also be crucial.
Wood Import Overview
In the first five months of 2024, newly planted forest area grew by 1.3% to 98.2 thousand hectares, with timber output rising by 6.6% to 7,413.7 thousand m³.
In June 2024, wood and wood product imports reached $250 million, a 31.3% year-over-year increase. Over the first six months, imports totaled $1.266 billion, a 21.7% rise.
Vietnam’s raw wood imports in June 2024 reached 510.4 thousand m³, valued at $168.4 million, marking a 24.1% volume increase year-over-year. For the first six months, imports reached 2.5 million m³, valued at $838.4 million, up 18.4% in volume and 11.2% in value compared to 2023.
(Source: General Department of Customs)
Raw wood imports from markets such as China, the EU, and the US have risen, while imports from others, such as Cameroon and Malaysia, have decreased. Imports of key wood species, including pine, oak, and walnut, have increased, while imports of others, like ash and teak, have declined.
Outlook for the Second Half of 2024
Vietnam wood and wood products demonstrated impressive growth in the first half of 2024, with a 22% increase in exports. This recovery is attributed to rising global demand, especially from key markets like the US and Europe, along with efforts by Vietnamese companies to diversify and optimize costs.
Vietnam wood and wood products now exports to 170 countries, with stronger footholds in emerging markets like the Middle East and India. However, challenges persist, including short orders, high raw material costs, and increasing shipping expenses.
Despite these challenges, Vietnam wood and wood products export sector is expected to continue its positive trend throughout the second half of 2024, supported by improved market conditions, increasing construction, and real estate activity, particularly in the US and EU.
Source: Panels Furniture Asia
