Vietnamese Wood and Furniture Industry Struggles with Export Orders Drop
The Vietnamese wood and wooden furniture industry has been facing numerous challenges due to a sharp decline in export orders. According to recent reports, export orders have dropped by 50-60% since the beginning of this year, forcing companies to cut off at least half of their production capacities. This has led to a significant impact on the industry’s growth and profitability.
Data from the General Department of Customs showed that the export turnover of wood and wooden products reached $3.9 billion in the first four months, down 30.6% year-on-year. This decline has been attributed to the ongoing COVID-19 pandemic, which has caused a significant drop in global demand for furniture and other wooden products. At the same time, the import value of wood and wooden products has also decreased significantly to $634 million, down 33.6% over the same period last year.
The industry’s struggles have been further compounded by the shortage of raw materials, particularly wood. This has led to a significant increase in prices, making it difficult for companies to maintain their profit margins. Many companies have been forced to cut back on their production, leading to job losses and a decline in the industry’s overall growth.
During the first quarter of this year, Vietnam’s wood and wooden furniture exports to major markets such as the US, Japan, and China fell sharply. The US, which is Vietnam’s largest market for wooden furniture, saw a decline of 30.9% in the first quarter of this year. Similarly, exports to Japan and China fell by 28.9% and 16.4%, respectively.
Industry experts have warned that the situation is likely to worsen in the coming months, as the COVID-19 pandemic continues to disrupt global trade and supply chains. The industry has called on the government to take urgent measures to support the sector, including providing financial assistance to companies and facilitating access to raw materials.
The Vietnamese government has responded by announcing a series of measures to support the industry, including the establishment of a $1.1 billion credit package to help companies affected by the pandemic. The government has also pledged to provide financial assistance to companies to help them upgrade their technology and improve their competitiveness.
In addition, the government has called on companies to focus on developing new markets and diversifying their product offerings to reduce their reliance on traditional markets such as the US and Japan. This will require companies to invest in research and development and to develop new products that meet the changing needs of consumers.
Despite the challenges facing the industry, there are some signs of hope. Vietnam’s wood and wooden furniture exports to the EU increased by 10.1% in the first quarter of this year, indicating that there is still demand for Vietnamese products in some markets. The industry will need to continue to adapt to changing market conditions and invest in innovation and technology to remain competitive in the global marketplace.
In conclusion, the Vietnamese wood and wooden furniture industry is facing significant challenges due to a sharp decline in export orders, shortage of raw materials, and the ongoing COVID-19 pandemic. The industry has called on the government to take urgent measures to support the sector, including providing financial assistance to companies and facilitating access to raw materials. The government has responded by announcing a series of measures to support the industry, including the establishment of a $1.1 billion credit package. The industry will need to continue to adapt to changing market conditions and invest in innovation and technology to remain competitive in the global marketplace.
