Production suspended – exports affected
In the first seven months of this year Vietnam’s wood and
wood product (W&WP) exports earned US$9.6 billion, up
55% year-on-year. However, the suspension of production
at local wood processing enterprises due to the COVID-19
pandemic is having effects on exports, according to the
Vietnam Timber and Forest Product Association
(VIFOREST).
Many members of the Ho Chi Minh (HCM) City Fine Arts
and Woodworking Association (HAWA) have outstanding
orders from overseas but because of the recent surge in
infections and the control measures being enforced
factories have experienced severe production problems
and more than half the works force in the industry has
been laid off according to VIFOREST.
In the Southern region, a major producer of wood products
for export, had 265 wood processing enterprises with a
total of 119,300 employees before the covid control
measures were introduced, now only 141 enterprises are
now in operation with 30,700 employees.
HCM City, Dong Nai, Binh Dương and Tay Ninh have
reported 134 wood processing enterprises suspended
production as they were unable to implement the “3 onsite”
model, which involves workers living on site.
Businesses implementing this model face additional costs
due to the testing of thousands of employees.
The other issue is that to maintain production enterprises
still have to secure raw materials, chemicals, packaging
and other requirements and also process export documents
through Customs and their banks which creates a risk of
infection.
VIFOREST has proposed that the Government allows the
association and the businesses to buy COVID-19 vaccines
and vaccinate staff and workers. The association also said
the Government should consider financial support to wood
processing enterprises. This could be in the form of a
reduction or delay in paying corporate income tax and
other taxes, delay of social insurance payments and land
rent exemption for this year. The Government could also
allow enterprises to extend loan payments and restructure
debts.
The association has requested the Ministry of Industry and
Trade to add raw materials for the wood processing
industry to the list of essential goods to ensure the supply
chain.
See: https://vietnamnews.vn/economy/1016895/covid-19-production-suspension-hampering-timber-exports.html
Export/import update
According to data from the General Department of
Customs Vietnam’s W&WP exports to South Korea in
July 2021 reached US$81.1 million, up 46.7% compared
to July 2020. In the first 7 months of 2021, the exports of
W&WP to the South Korean market amounted to
US$534.5 million, up 17% over the same period in 2020.
Exports of guest and dining-room furniture in July 2021
totalled US$304 million, up 10.5% compared to July 2020.
In the first 7 months of 2021, export earnings from guest
and dining-room furniture is estimated at US$2.1 billion
US$, up 58% over the same period in 2020.
Exports of W&WP in the last week of August dropped
around 14% compared to the previous week. In particular
there was a sharp drop in wooden furniture exports.
Imports of pine in July 2021 were estimated at 124,100
cu.m worth US$29 million, up 5.3% in volume and up
5.0% in value compared to June 2021; compared to July
2020, there was an increase of 116.4% in volume and an
146.3% in value.
In the first 7 months of 2021, pine imports were estimated
at 896,500 cu.m worth US$203.5 million, up 93% in
volume and 108% in value over the same period of 2020.
Imports of log and sawn wood from Africa in June 2021
reached 75,020 cu.m worth US$26.75 million, down 8.8%
in volume and 14% in value compared to May 2021; up
0.9% in volume but down 1.3% in value over the same
period of 2020.
