Overview of the Global Timber Market
According to researchandmarkets.com, the global timber market has been witnessing notable changes in recent years. The total market value of global wood products is projected to increase from $750.14 billion in 2023 to $805.03 billion in 2024, achieving a compound annual growth rate of 7.3%. This growth is primarily due to favorable economic prospects as well as strong demand from major markets. These prospects are expected to drive public investment, joint ventures, and foreign direct investment, thereby boosting the timber production market. The Asia-Pacific region currently holds the largest share of the timber market, followed by North America. Along with the global timber market, the Vietnamese timber market has also seen many positive developments in the first six months of 2024.
Overview of the Vietnamese Timber Market
Regarding the scale of the timber market, Vietnam currently has about 14.86 million hectares of forest, of which production forests account for about 7.96 million hectares. This forest area is a major source of timber for both domestic consumption and export. The annual harvested timber volume reaches about 25-30 million cubic meters. However, most of this wood comes from plantation forests, primarily serving the production of industrial wood and furniture. Besides domestic timber harvesting, Vietnam also imports wood from abroad. In 2023 alone, Vietnam imported about $2.19 billion worth of wood, mainly from China, with key items including logs, sawn timber, plywood, veneer, etc.
In terms of exports, Vietnam is one of the largest exporters of wood products in the world. In 2023, the export turnover of Vietnamese wood and wood products reached around $13 billion, mainly to markets such as the US, EU, Japan, and South Korea, making Vietnam the fifth-largest wood and wood product exporter in the world, alongside countries like China, Canada, the US, and Germany. This sector has shown notable promise and potential for the timber industry in the first half of 2024.
Overview of Vietnamese Timber Exports 2024
According to data from the General Department of Customs, the export turnover of timber and wood products in the first six months of the year reached $7.5 billion (including non-timber forest products, the total export turnover reached $7.95 billion), an increase of 23.1% compared to the same period in 2023, achieving 52.5% of the planned target. This is also the product with the highest trade surplus in the agriculture-forestry-fisheries sector. With this result, the export turnover of timber and wood products is expected to set a record of $17.5 billion, surpassing the target of $15.2 billion set at the end of 2023.
Export turnover increased in most countries due to high consumption demand, except for Japan and South Korea. Among these, India experienced the highest growth rate at 94.2%; China grew by 49.3%; and the United States by 24.5%. The United States remains the largest export market for Vietnamese wood and wood products. According to data from the General Department of Customs, in the first six months of 2024, the export value to this country reached $4.07 billion, accounting for 54.5% of the total export turnover. Following this is the Chinese market, with $1.05 billion, accounting for 14%, and Japan with $796.8 million, accounting for 10.7%.
Conversely, Vietnam is also one of the largest import markets for the US, alongside Canada, China, Brazil, and Chile. Most Vietnamese wood products have shown positive growth, especially wooden furniture. Since 2020, Vietnam has surpassed China to become the largest exporter of wooden furniture to the US, the largest furniture consumer market in the world. According to information from the Vietnam Timber and Forest Product Association, in the first six months of 2024, wooden furniture imported from Vietnam accounted for about 41% of the total import value of wooden furniture in the US, making Vietnam the fastest-growing country among the top 10 suppliers of wooden furniture to the US.
Even though it is not yet the peak season for wooden furniture consumption, in recent months, Vietnam's wood and wood product exports have still reached $1.2 - $1.4 billion per month, indicating a positive outlook for the industry in 2024.
Prospect
1. The global demand for wood products is expected to increase in the near future.
Analysis of the annual cycle shows that the demand for importing wood and wood products, particularly wooden furniture, in major markets usually increases notably towards the end of the year. This trend aligns with the housing market entering the completion phase and the rising need for new furniture to welcome the new year. Additionally, easing inflation in major markets such as the United States and the EU has boosted consumer activities, thereby creating optimism for the global wood market in general and Vietnam's wood market in particular.
2. The Vietnamese wood industry has many advantages.
Vietnam is currently dominating the production and export market for timber in Asia and globally, alongside countries such as China, Thailand, and Indonesia. Moreover, the Vietnamese wood industry boasts many advantages, including a highly skilled workforce, abundant raw materials both domestically and imported, which can meet the high global consumption demand, and notable export potential.
3. The United States, the largest wood import market in the world, has many favorable actions for Vietnam.
The United States has been imposing very high tariffs on wood and wood products from China, with anti-dumping duties at 183.36% and countervailing duties ranging from 22.98% to 194.9%. This has led to a shift in orders from the US to wood-exporting countries in the ASEAN region, including Vietnam. Vietnam is currently the largest exporter of wood and wood products in Southeast Asia, thus presenting a notable opportunity for the Vietnamese wood industry to capitalize on orders previously directed to China.
Additionally, the US has canceled investigations against Vietnam. Specifically, on July 17, the Trade Remedies Authority (Ministry of Industry and Trade) announced that the US Department of Commerce (DOC) had issued the final conclusion of the investigation into the scope of products and anti-circumvention of anti-dumping/countervailing duties on wooden cabinets imported from Vietnam. As a result, the investigation into anti-circumvention of anti-dumping/countervailing duties on wooden cabinets imported from Vietnam was completely canceled. This move will likely ease the export of Vietnamese wood products to the US, enabling higher growth rates from now until the end of the year.
4. The number of FSC certifications in Vietnam is rapidly increasing.
According to the Forest Stewardship Council (FSC), there are currently about 334,109 hectares of FSC-certified forests in Vietnam, an increase of 18.07% compared to the end of 2023. This includes more than 20,000 hectares of natural forests that have not been harvested. Additionally, Vietnam has many other FSC-certified resources, such as over 9,000 hectares of bamboo and 6,000 hectares of rubber, with rubberwood being an important export material in the global market. This will make it easier for Vietnamese wood and wood products to access major markets like the US and EU, which have stringent requirements for sustainability and green transitions.
Risks
Despite many advantages and prospects, the wood industry still faces certain risks. First is the influx of Chinese products. The high tariffs imposed by the US government on Chinese wood products have led to these products being exported through Vietnam or falsely labeled as Vietnamese to evade taxes. If the origin of exports to the United States cannot be proven, Vietnamese wood may face tariffs equivalent to those imposed by the US on China.
Additionally, wood and wood products exported to major markets such as the US and EU continue to be under pressure from trade defense investigations and technical barriers related to the environment, sustainable development, and green transitions. Specifically, from the end of 2024, Europe will implement laws and regulations aimed at preventing forest degradation.
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