Export growth despite challenges According to Do Xuan Lap, Chair of the Vietnam Timber and Forest Product Association (VIFORES), 2020 was an extremely difficult year for the industry. In addition to supply chain disruptions caused by Covid-19, the wood industry was hit with lawsuits related to trade defense, dumping, avoidance of origin indication, and skyrocketing prices of materials. The pandemic also had a negative impact on 6,000 enterprises in the forest production industry, especially over 1,600 enterprises processing and exporting forest products, forcing some of them to close. In addition, logistics activities faced many difficulties due to the lack of containers, increasing freight rates. Nonetheless, the export value of timber and wooden products rose 16.4 percent to US$13.17 billion, accounting for 31 percent of the agriculture sector’s total export value. Addressing a January 6 conference, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said the sector has developed processing activities of wood and furniture products but few high-value handicraft products and furniture. He urged the sector to focus on development of the forestry economy and annual production growth of 10 percent. Cuong also said the forestry sector is facing many difficulties, including fiercer global trade competition. The Republic of Korea (RoK) and the US, two key furniture export markets of Vietnam, have started tax investigations against Vietnamese furniture exports, requiring it to speed up reforestation to supply timber with origin for exports and processing. Lap said the current forest coverage rate is 42 percent but the sector must pay attention to forest development in the three key areas of the northwest, Central Highlands, and coastal region. Mixed 2021 outlook In addition to the ongoing impact of the coronavirus pandemic, Vietnam faces the risk of a US anti-evasion tax on Vietnamese timber. Lap also emphasized that …
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