Workers at a furniture factory in the southern province of Đồng Nai. — VNA/VNS Photo

HÀ NỘI — Wood production and exports have hit a slump in recent months after showing strong numbers during the first half of the year, according to a report by the Ministry of Agriculture and Rural Development (MARD). 

The country exported US$8.71 billion worth of wood products in the first half of 2021, a 62.9 per cent increase year-on-year. However, the sector has been hard hit by yet another outbreak of the virus. 

The virus has paralysed some of the largest production centres of the industry including the southern provinces of Bình Dương and Đồng Nai, said Bùi Chính Nghĩa, deputy head of MARD's department of forestry. 

"We have seen significant drops in wood exports in recent months. Exports for June, July and August dropped by 16 per cent compared to the previous three-month period. August saw the biggest drop at 22 per cent compared to July," said Nghĩa.

More than half of the country's wood producers have had to shutter or scale down their operations since the beginning of the pandemic, said a recent report by the Association of Vietnam Timber and Forest Product. 

To make matter worse, other costs including transport, raw materials and container rental have also been on the rise. Some markets have started to deploy defence mechanisms against Vietnamese products after a period of unchecked rapid growth. 

MARD Deputy Minister Lê Quốc Doanh said wood producers must carefully study trade barriers and anticipate how certain markets might respond to Vietnamese products in advance.

"Firms must look at the big picture and come up with a long-term plan as we make the transition from forest production to a forest economy," Doanh said. 

The US continued to be Việt Nam's top buyer this year along with Japan, China, the EU and South Korea. Together the big five markets account for 90 per cent of the country's total export of wood products.

The sector had been forecast to grow by 15 per cent this year, largely thanks to a number of free trade agreements including the European Union–Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) that have recently into effect. — VNS