After a period of continuous growth, from April 2022 wood exports began to stagnate, and by July 2022 there were signs of negative growth compared to the same period in 2021. According to data from the General Department of Customs, exports of wood and wood products in July 2022 reached only USD 1.3 billion (down 7.1% year-on-year), of which exports of wooden products amounted to just USD 845.9 million (down 9.7% year-on-year). This was the first month in more than a year that the wood industry recorded negative growth.
According to enterprises, the cause of this situation is that inflation in several key export markets of the wood industry has led to reduced consumer spending; major export markets such as the US, EU, and Australia have continuously cut purchases over the past three months, causing businesses’ inventories to rise sharply. Not only has inflation hit key export markets, but in June 2022 the US Department of Commerce (DOC) announced the initiation of an investigation into the evasion of anti-dumping and countervailing duties on wooden cabinets imported from Vietnam, causing concern among many investors. According to the Trade Remedies Authority of Vietnam (Ministry of Industry and Trade), the DOC extended the deadline for issuing the final conclusion in this case to October 17, 2022, and advised enterprises to fully comply to avoid being deemed uncooperative by the DOC. This has made things even more difficult for wood enterprises because the US is a very large market for Vietnamese companies (accounting for more than 60% of Vietnam’s total export turnover of wood and wood products). In addition to difficulties in export markets, enterprises also “shoulder” many other challenges in the production process as prices of raw materials, transportation costs, and labor expenses rise.
To cope with the decline in export orders, many enterprises have had to cut production time, arrange for workers to work in shifts, and reduce the number of office staff. In addition, some enterprises have returned to tapping the domestic market to partially ease business pressure. Many enterprises said that, in the current difficult period, the “Vietnam International Furniture & Home Accessories Fair – VIFA-EXPO 2022,” to be held in Ho Chi Minh City from August 31 to September 3 with the participation of 34 foreign enterprises, will be a lifeline for businesses, as it is the largest event in Vietnam for promoting the export of wood and furniture products.