Export orders of Vietnamese timber and furniture companies drop by 50-60%

Export orders of Vietnamese timber and furniture companies drop by 50-60%

Since the beginning of this year, Vietnamese timber and wooden furniture enterprises have faced many difficulties, with export orders falling by 50-60%, forcing enterprises to cut at least half of their production capacity.

According to data from the General Administration of Customs of Vietnam, the export value of timber and wood products in the first four months was US$3.9 billion, a year-on-year decrease of 30.6%. Exports of wood products fell 38% year-on-year to US$2.6 billion. Imports of timber and wood products also dropped sharply to US$634 million, a year-on-year decrease of 33.6%.

In the first four months of 2023, Vietnam’s exports of these commodities to major markets such as the United States (US$2.02 billion, down 38%) have fallen sharply; Japan (US$556 million, 1.5%); South Korea (US$274 million, 22%) and China ($481 million, 13%).

Analysts and businesses said the reduction in exports of lumber and wood products was predictable. They attributed the drop to a surge in inflation in some countries, which are also major importers of Vietnamese timber and wood products. For example, in the first three months of this year, the United States imported lumber and wood products worth US$1.24 billion from Vietnam, a year-on-year decrease of 42%, and the demand for wooden furniture imports also fell sharply. According to timber exporters, their export orders from the US market have decreased by 50-55%, depending on the type of timber product. Orders from the European Union, another major export market, also fell 60%.

In this regard, Vietnamese trade experts said that although orders from Vietnam have fallen sharply, the United States is still the main export market for Vietnam's timber industry. Therefore, according to the consumption trend of the market, enterprises can increase channels to improve the brand awareness of Vietnamese enterprises and maintain the US market by converting production and introducing Vietnamese wood products into large distribution systems such as Wal-Mart and Amazon.

In addition, companies need to follow the national mechanisms and policies of importing countries on the quality, design, legality and sustainability of imported wood products and provide them with information on requirements and trade policy changes in major markets such as the United States, the European Union and East Asia.

"In the current difficult situation, provincial timber companies have cut production capacity by 60 percent," said Nguyen Liem, chairman of the Binh Duong Woodworking Association. He also predicts that around the beginning of 2024, the market will improve and merchants will have export orders again. However, recovery growth will depend on the world economic and political situation.

Du Xuanli, chairman of the Vietnam Timber and Forest Products Association (VIFOREST), also suggested that the Ministry of Foreign Affairs and Vietnamese embassies abroad should better promote the holding of international furniture fairs in Vietnam. Embassies should also provide information and support Vietnamese companies to participate in international furniture fairs.