The US was still the lead importer of wood from Viet Nam, reaching $1.38 billion and accounting for around 36.7 per cent of the sector's exports.— Photo baodaklak

HA NOI (Biz Hub)— Earnings from wood exports are predicted to exceed US$3.77 billion for the first nine months of this year, up 12 per cent on 2012 figures, according to the Ministry of Agriculture and Rural Development (MARD).

Wood produce saw strong growth in shipments made to the US, South Korea, Japan and China; driven by demand increases in most countries; including by 7.8 per cent in the US, 17.1 per cent in China, 20.3 per cent in Japan and 49 per cent in South Korea.

The US was still the lead importer of wood from Viet Nam, reaching $1.38 billion and accounting for around 36.7 per cent of the sector's exports.

Wood exports are expected to hit $5.5 billion this year, reflecting a growth rate between 10-15 per cent, while Viet Nam is now the second largest wood exporter in Asia, according to the ministry.

Nguyen Ton Quyen, General Secretary of Vietforest, attributed the increase to the global economic recovery and importers shifting orders from China to Viet Nam due to lower wages and the need hedge risk against price volatilities.

Quyen told Vietnam Economic Times that orders had increased by 20-30 per cent this year.

Since early August, wood exporters were inundated with orders from foreign importers, with many exporters even negotiating orders for 2014. Many are believed to be running at full capacity to make deliveries on time, with many taking on extra staff to meet demand.

According to the Vietnamese Customs agency, wood export turnover from FDI businesses accounted for 64 per cent of the industry's total export turnover, while growth in the sector's FDI had been aided by strong financial support, access to local partners and distribution networks in foreign countries enabling fast networking between buyers and sellers.

However, foreign invested companies have been far more successful in reaping the gains of the surge in demand for exported wood products. Statistics showed FDI businesses were able to rent local workshops and warehouses of local wood processors to expedite orders to the US and China.

Meanwhile, local processors had been hampered by a shortage of finance, trained human resources and raw materials. While Vietnamese timber is still well regarded in foreign markets and contributes significantly to export turnover, high-end manufacturing accounted for a minority of Vietnamese produce.

Additionally, the country's $4.6 billion in timber exports still pales in comparison to nearly $11 billion China raked in from wood exports.

According to the Viet Nam Administration of Forestry, the domestic wood processing sector saw consistent annual growth of 42 per cent between 2005 and 2010. This astonishing growth has continued, holding at 20-23 per cent during the last three years. Meanwhile, the scope of exports has increased dramatically, with a global penetration of more than 100 countries and territories. — VNS