Timber material price: Waiting for increased price
Domestic and import timber material prices are on the rise. The orders of enterprises are more and more, the competition of timber materials is occurring fiercely.
Be worried about keeping domestic materials
According to the General Department of Vietnam Customs, the export value of timber and wood products in March 2018 reached US$661 million, made the export volume of this industry in the first quarter was estimated at US$1.87 billion, increased by 5.8% over the same period in 2017. The timber export has achieved the growth, which has made the demand oferials be very large.
Binh Duong Furniture Association (BIFA) said that many wooden enterprises are having the orders until the third quarter of 2018. However, the material resources for manufacture are making pressure for businesses. China is not only pushing up the purchase of timber materials, but also India, Brazil, Malaysia and Bangladesh are also expanding their search for raw materials, including Vietnam. The demand for raw materials is mainly focused on MDF, pine, eucalyptus, rubber wood ... Meanwhile, rubber wood material has been increasing continuously during the last time.
Mr. Tran Thanh Lam, a director of Lam Phat-Thuan An company (the company specializes in purchasing rubber wood) said that the price of rubber wood which had a diameter of 10cm or more being purchased by traders at 1.4 - 1.6 million VND per tree, up more than 30% compared with 6 months ago and nearly tripled compared to a few years ago. The price of rubber wood is so high, but his company is not enough to meet the demands of enterprises.
A representative of Quang Ha Co., Ltd in Bac Tan Uyen town shared, each month the company provided about 2,000 m3 of rubber wood. This showed that the demand for using available materials in place is very large.
The import wood materials are also in the same status “Demand is higher than supply capacity”. Eastern Lumber Co., Ltd in Di An imports thousands m3 of wood from Europe, Africa, America, New Zealand, etc but it has not met the demand in Binh Duong.
Mr. Luong Ngoc Kim - Director of Kim Thanh A Co., Ltd shared, although he anticipated the difficulties in timber materials in 2018, there were a huge demand in the countries specializing in timber export such as Malaysia, India, China, Bangladesh etc, which were making a deficit of raw materials in the country.
Be worried about the future
Vietnam and the European Union (EU) finished the negotiations on the VPA/FLEGT (Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade) in 2016. After this agreement comes into force, all Vietnamese timber products which export to the EU must have a legal origin. Therefore, it is a difficult task for the industry to find a timber supplies which meet the growth rate of the woodworking industry at 10-15% per year and ensure legal timber resources.
Binh Duong wood enterprises recommended the Government many times to have solutions to restrict the export of timber materials; to strengthen the inspection and supervision in order to limit the foreign traders’ collection and control of the domestic planted timber on the market. However, no specific measures have yet been taken by the State to limit the export of raw materials from enterprises.
Mr Kim is worried that the whole country’s wood industry in general and Binh Duong are towards the target of US$10 billion in wood exports in 2020 and US$20-30 billion in 2040. Thus, the demand for legal wood materials is very high. If the wood industry in the country does not prepare enough raw materials, it is likely that the orders will “flow” to Vietnam’s export rivals in the market.
Meanwhile, the import timber materials are also facing risks, as some countries which specialize in exporting timber materials without legal origin. At present, the timber materials from Africa to Vietnam account for about 20% (about 800,000 m3 per year) in which Cameroon, Ghana, the two countries which are supplying the largest raw materials for Vietnamese market. These two countries are negotiating with the EU to establish the Timber legality assurance system. Meanwhile, the remaining countries have not met the requirement of the legitimacy yet.
This shows that the pressure of material resources is the worry of Binh Duong enterprises right now and in the future. Although the businesses have been actively trying to keep raw materials in place, they are worried about the legitimacy of imported raw materials.
According to experts, to solve the problem of raw materials, the State authorities should soon issue the mechanisms and policies to encourage enterprises to import timber materials, limit the export of raw materials. In addition, businesses need to be informed about the timber resources, supplied markets for Vietnam etc in order to help businesses avoid the unfortunate risks.
Origin: No. 99. VIETNAM TIMBER & FOREST PRODUCT ASSOCIATION.