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Vietnam's epidemic "lost", US hardwood exports may plummet by 15%!

Views: 354     Author: Site Editor     Publish Time: 2021-12-15      Origin: Site

As an important destination country for the transfer of China's furniture industry, Vietnam has attracted much attention. For most of 2020 and early 2021, Vietnam has been relatively free from the new crown epidemic and has become one of the few countries in the world with economic growth. At the end of April 2020, Vietnam announced that it had contained the epidemic.

However, the current situation is that Vietnam, which has withstood the original strain of the new crown virus, has suddenly lost ground. Currently, all parts of the country are under a new blockade.

In late July, Ho Chi Minh City banned citizens from going out at night. Two days later, a similar ban was extended to 11 southern provinces.

On August 8, regular commercial flights between some provinces and cities were suspended.

On August 13, commercial flights between Ho Chi Minh City and Hanoi were restricted to one flight per day.

On August 14 and 16, the cities of NhaTrang and DaNang respectively banned all residents from leaving their homes for one week. Now Da Nang has extended the lockdown period for “stay in place” to 9 On the 5th.

From August 23 to September 6, Ho Chi Minh City prohibited residents from going out to buy food and other items, and used the army to enforce the ban and distribute food.

Under this strict blockade, the American hardwood industry is also facing great challenges.

U.S. hardwood's third largest market in the world

In the past 20 years, Vietnam has grown from a negligible market for American hardwood to the third largest market in the world. By the end of 2020, the total shipments of American hardwoods to Vietnam have doubled in 2011 and more than 10 times in 2004.

Statistics from the American Hardwood Review show that throughout the 2010s, Vietnam accounted for 10% of all U.S. hardwood sawn timber exports. However, due to the US-China trade war, Vietnam’s share of U.S. hardwood sawn timber exports has steadily increased from 2018 to the end of 2020, reaching a peak of 17% in 2020.

To a large extent, this is related to the shift of China's manufacturing industry to Vietnam in order to avoid (customs) taxes on imports of American sawn timber and exports of manufactured products to the United States. Vietnam’s own factories probably also increased production to make up for China’s reduced production.

Vietnam is the largest global market for Liriodendron tulipifera, accounting for 57% of total exports in 2020. An exporter estimates that 40%-50% of the common grades of American tulip tree wood are exported. Among them, the Vietnamese furniture factory is the largest customer, and it is also the main market for general grade 2 white oak.

In addition, Vietnam is the second largest global market for American red birch. In fact, Vietnam has become the third or fourth largest market for U.S. exports of hardwood species.

Shipments dropped sharply

Except for the decline in the second quarter of 2020, most of the exports to Vietnam have not been affected by the new crown epidemic, and even the third and fourth quarters of shipments to Vietnam climbed to record highs.

However, in the first half of 2021, shipments of U.S. hardwood sawn timber to Vietnam dropped sharply.

U.S. timber exporters expect that although the Vietnamese government expects the strict blockade to achieve the same success as the outbreak, the blockade will severely disrupt U.S. hardwood timber exports. There is reason to believe that by the end of this year, shipments will continue to decline, and it is estimated that it may reach a 15% decline.

In the first half of 2021, red birch exports to Vietnam were stable, and walnut shipments to Vietnam increased in the second quarter, despite tight supply and high prices. But for these wood species, the decline in the second half of the year may also have an impact on their prices. However, in the United States and other countries around the world, the demand for other tree species is strong enough, and it will also make up for some of the reduced purchases in Vietnam.

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