New markets – Bright spots come from India and the Middle East
In the first 4 months of 2023, Vietnam’s exports of wood and wood products to major markets decreased sharply compared to the same period last year. Data from the General Department of Customs shows that export turnover to the US market reached 2.02 billion USD, down 37.9%; Japan 556.2 million USD, down 1.5%; Korea reached 273.5 million USD, down 22.2%; China reached 481.2 million USD, down 12.8%; UK reached 60.33 million USD, down 38%; Australia reached 35.7 million USD, down 39.7%,…
According to information from the Vietnam Timber and Forest Products Association, regarding the order situation, preliminary information from wood processing enterprises shows that export orders to the US market decreased by 50 – 55% depending on the types of wood products, wooden furniture. As for Plywood products, there are currently only a few businesses with export orders to this market. The number of orders has decreased sharply, many businesses are not receiving new orders. The number of orders has decreased greatly due to the impact of the trade war and the world economic crisis in general.
But it can be seen that the US market has gradually increased the import value from nearby markets such as Mexico, Canada, Brazil… This clearly shows that the policy of shifting part of the supply chain of importers The US has switched to a strategy of buying from neighboring countries to minimize costs, as well as delivery time, and can be more proactive in supply when consumer demand is increasing.
In particular, the Vietnamese market has an advantage in plywood products and product groups serving construction, specifically plywood products, serving interior design, housing construction, and raw materials for making furniture,… In addition to the US market, the EU market is also increasing the value of Plywood export turnover, as the export value of plywood products serves construction and interior design in the market. This is increasing steadily.
Until now, the Indian market has not been Vietnam’s main export market. However, data from customs shows that export turnover to this market in the first 4 months of 2023 will reach 21.19 million USD, an increase of 3 times compared to the same period in 2022 (7.6 million USD). The main product Vietnam exports to this market is MDF, accounting for 47% of the total export value to this market. In addition, other products of Plywood are also increasing significantly, becoming a priority choice besides MDF. Showing the huge potential for importing Plywood from the Indian market in the coming years.
Similarly, Vietnam’s export turnover of wooden products to countries in the Middle East market will increase in the first 4 months of 2023. UAE is the main market, in the first 4 months of 2023 reaching 11.2 million USD, an increase of 38%. compared to 2023. The main products exported to this market include wooden furniture used in construction, chairs, and wooden furniture. Therefore, it can be seen that the demand for using Plywood for construction purposes and furniture production for the Middle East market is extremely potential.
All of information shows that the US market is still the most important market for the wood industry in general and plywood in particular. Therefore, emerging markets will be a golden opportunity for businesses that want to grow quickly and create a big push to stimulate customer demand for Plywood in the Middle East and India.
To have a competitive advantage in this market, wood businesses in Vietnam need information to reevaluate strategic products and potential products where businesses have a competitive advantage.
For the Indian market, businesses in the wood industry want to find out information about the potential for wood products, including assessing the demand for MDF products and other Plywood products. In the Middle East market, manufacturing businesses must survey the potential of export opportunities to this market and the most potential types of products include film faced plywood, commercial plywood, etc.
To compete with wood businesses in countries such as India, Indonesia,… technological innovation is the goal that businesses aim to reduce costs, take advantage of input materials, and improve product quality. However, currently, Vietnamese enterprises are still weak in the stages of processing input materials such as wood drying technology, sawing, chemicals, to prevent moldy wood, etc.
Inputs of the wood industry, in addition to wood materials, which need to improve the quality of planted forest wood, other materials such as nails, screws, etc. also need to have uniform quality standards. Currently, there are not many businesses investing in this field. These are also difficulties that wood industry enterprises are facing.
Although the export turnover of wood and wood products to the United States has decreased according to the general situation, this is still the market that determines the growth of the wood industry. Therefore, Vietnamese businesses need to continue to maintain this market by updating information and converting production according to market consumption trends. And expand into new bright spots such as the Indian and Middle East markets to build a brand and cover the market as quickly and as soon as possible.