Vietnam overcomes immediate market challenges of pandemic
Viet Nam appears to have overcome the immediate market challenges of the COVID pandemic remarkably quickly. In April 2020 in the immediate aftermath of lockdown measures in the US and Europe, the Vietnam Timber and Forest Product Association (VTFPA) issued a statement that the wood industry in the country faced a ‘disaster’ as ‘many Vietnamese wood processing enterprises have had orders cancelled or suspended,’ that they were ‘sitting on 100s of containers of finished goods that cannot be shipped and must be stored in warehouses at considerable cost for an unknown length of time’, while also ‘facing sharp rises in input prices for wood and other materials’ and freight costs that ‘have increased $500-1,000 per container’.
However, the situation seems to have been transformed before the end of the year. According to a report in the ITTO MIS (1-15 January 2021), in the first 11 months of 2020, Viet Nam’s total wood and wood products exports amounted to US$11.023 billion, 15.6% more than the same period in 2019. At US$6.37 billion, exports to the United States were 35% greater than the same period the previous year. Exports also increased to China (+4% to US$1.08 billion), South Korea (+1% to US$728 million) Canada (+15% to US$196 million), Australia (+11% to US$154 million) and Germany (+3% to US$104 million). These gains were only partly offset by declining exports to Japan (-4% to US$1.16 billion), the UK (-27% to US$207 million), France (-17% to US$95 million) and the Netherlands (-8% to US$64 million).
The downturn in Viet Nam’s exports to the EU27+UK in 2020 was longer lasting than the downturn to the United States, falling very sharply in May and June and barely recovering even by October. This is particularly true of the UK, still the largest market in the EU27+UK for Vietnamese wood products, which was particularly hard hit during the first wave of the pandemic and where the market faced added uncertainties due to Brexit. 12-month rolling total wood and wood furniture imports into the EU27+UK from Vietnam were US$876 million in the year ending October 2020, down from US$982 million in the previous 12-month period. EU27+UK imports from Viet Nam in 2020 were around the level last seen in 2016 (Chart 15).
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