09:54 | 05/01/2016 Trade
(VEN) - Thanks to over nine-percent growth in the first 10 months of this year, export turnover of wood and wood products is expected to reach to annual target of over US$7.2 billion, an increase of around 15 percent compared to a year ago. However, sustainable growth requirements for furniture exports have become increasingly urgent due to export demand fluctuations in the US, Japan and the EU.
Sustainable growth requirements for furniture exports have become increasingly urgent - Photo: Can Dung
Export turnover of wood and wood products reached US$6.23 billion in 2014, an increase of 11.5 percent compared to 2013. Exports to large markets reached high growth such as US$2.23 billion in the US, US$952 million in Japan and US$740 million in the EU.
Furniture exports are expected to do better this year as businesses have devised a series of solutions to expand their markets and find more high-quality orders. According to the Ministry of Agriculture and Rural Development, export turnover of wood and wood products in the first 10 months of the year reached US$5.2 billion, an increase of 9.2 percent compared to the same period last year.
Vietnam Timber and Forest Products Association (Vietfores) Deputy Chairman, General Secretary Nguyen Ton Quyen said that furniture exports could total more than US$7 billion with growth of around 10 percent this year.
Global demand for wood and wood products stands at around US$230 billion a year including US$85 billion in the EU and US$28 billion in the US. Therefore, furniture exports remain an attractive option. However, Vietnam needs to adopt specific changes to adapt to commitments it has made in free trade agreements together with strict regulations for wood and wood products.
According to furniture manufacturers, the EU Timber Regulation (EUTR) and new administrative procedures have had a large effect on Vietnamese businesses.
After two years of implementation of the EUTR, Vietnamese businesses have faced difficulties because they have found it hard to explain the legality of melaleuca and rubber woods based on standards accepted by European importers.
European importers are requiring partners in their supply chain to provide verification from third-party wood suppliers, making it difficult for Vietnamese businesses to export wood and wood products to this market.
NEPCon currently provides sets of tools and training programs in terms of accountability for small and medium-sized enterprises in such projects relating to the EU’s Forest Law Enforcement, Governance and Trade (FLEGT) in Vietnam and Cameroon. This is one of specific solutions to improve capability for furniture manufacturers.
The US remains Vietnam’s largest furniture importer with sales growth of around 26-27 percent, followed by Japan, China and the EU. Vietnamese furniture exports currently rank sixth, second and first in the world, Asia and Southeast Asia, respectively.