12:15 | 21/08/2016 Trade
(VEN) - Wood chip exports are facing double difficulties as its volume and value reduced by around 40 percent in the first five months of this year compared to a year ago.
Wood chip is one of its processing sector’s key exports, with export turnover of nearly US$1.2 billion in 2015, said Dang Viet Quang from the Forest Trends in a workshop on new challenges to Vietnam’s wood chip exports on July 15, 2016. However its volume and value significantly fell in the first five months of this year with 1.8 million tonnes for US$248 million, a decline of around 40 percent compared to a year ago, he added.
Many risks lurking
If many difficulties exist in the last months of the year, 2016’s wood chip export turnover will only reach around US$600 million, equivalent to 50 percent of last year’s figure.
In addition to narrowed consumer markets and dropped export prices, the fall in wood chip exports resulted also from the world’s declined demand on pulp, especially in the Chinese market. Furthermore, unfavorable factors including the new supplies from African countries and strong increase of material supply from Thailand have changed supply and demand in the market, leading to a fall in the export value of Vietnam.
While the imposition of a tariff rate of two percent on wood chip exports, equivalent to US$2.5-2.8 per tonne since January 1, 2016 has added a further challenge to the Vietnamese wood chip processing sector, it is not a surprising policy, as explained by Deputy Minister of Agriculture and Rural Development Ha Cong Tuan. Accordingly, tariff rate on wood chip exports was discussed in the last five years, with the aims to cut down the proportion of wood chip in the export structure. To timely response to changes in both international and domestic markets, the sector needs to enhance forecasting capacity and find the solution for the balance of supply and demand, which is concluded as the root of the problem.
Deputy Minister of Agriculture and Rural Development Ha Cong Tuan: The Vietnamese wood chip processing sector will face many difficulties from its uncontrolled and rapid development.