Currently, the export price of wood pallets is decreasing, and the price of input materials has also decreased but is still at a high level. Bank interest rates are at a high level. Factories that have been or are in the process of being completed but have to use bank loans are currently under tremendous pressure.
Export prices hit a record in 2022
According to statistics of the General Department of Forestry (Ministry of Agriculture and Rural Development), the export value of wood pellets will increase sharply in 2022, with the export volume reaching over 4.88 million tons, up 39.35% compared to the previous year. As a result, the export value in 2022 will reach over USD 787 million, an increase of more than 90% compared to 2021. As a result, monthly export volume and value in 2022 will almost increase sharply compared to the same period in 2021.
Notably, the average export price of pellets in 2022 is at a record high compared to the past 10 years. Tablet prices have increased continuously since January and showed signs of slowing down from June to September, rebounded after that and reached a record of more than 189 USD/ton in December 2022.
Regarding the market, almost all wood pallets from Vietnam are exported to Japan and Korea. In 2022, the volume of wood pallets exported to these two markets accounted for 97.5% of the total volume and 96.7% of the total export turnover of Vietnam's wood pallets in the year, respectively, and the volume exported to the Japanese market had a significant increase compared to 2021.
Forecasting the output and production market situation in 2023, the research team of the Vietnam Timber and Forest Products Association, Forest Trends, said that Vietnam is currently a major supplier of pellets in terms of supply and demand. 2nd in the world (after the US), the supply-demand picture of this commodity will directly affect Vietnam's production and export activities.
Specifically, in 2023, the supply of wood pallets to the EU market from the US and Canada tends to expand again after a supply scarcity period due to the Russia-Ukraine war and high shipping rates. In the first half of 2022, North American manufacturing enterprises must redirect their supply flow from the Japanese and Korean markets to supply to the EU to capture the advantage of high prices from the EU. As a result, supply from North America dropped sharply, forcing Japanese and Korean businesses to find alternative sources. This creates opportunities for Vietnamese businesses to expand their export markets here. In addition, war-related uncertainties and high freight rates created stockpiling sentiments in Japan and Korea. Up to now, the quantity of goods in these two markets is at a high level. In this context, Vietnamese exporters will hardly have the opportunity to expand their markets in Korea and Japan in 2023.
More stringent requirements in many markets
In contrast to the average export tablet price in 2022, which reached a record high in the last 10 years, in 2023, due to abundant supply, the amount of goods available in markets, especially in Japan and Korea The high level is directly affecting the export price level. The export price of wood pallets from Vietnam is on a downward trend. According to information from some exporters, in the coming time, the export price to Korea may drop to 110-120 USD/ton and Japan 150-160 USD/ton. This will be an extreme reduction compared to the current export price.
In addition, extensive inventories and abundant supply also allow businesses in Japan to tighten standards for quality and sustainability. In 2022, when the supply to these markets is in short supply, many importers here under supply pressure have no choice but to accept products of lower quality than expected. This creates opportunities for many Vietnamese manufacturers and traders with products of limited quality to enter the market. However, up to now, some Japanese enterprises are asking suppliers from Vietnam to standardize quality standards, including sustainable products. As a result, some ships from Vietnam to Japan were returned because they did not meet the requirements.
In addition, the energy crisis in 2022 in the EU has formed great expectations for Vietnam's pellet industry in accessing and expanding with this potential export market. However, statistics from the General Department of Customs show that by the end of 2022, Vietnam's pellet export turnover to this market is only under 15.2 million USD, equivalent to 1.9% of the total turnover of Vietnam's wood pellet exports. This figure shows that pellets from Vietnam have not been able to break into the market, and the industry's expectations about this market cannot come true, at least in the short term. The reason is because of the strict quality standards set by the EU, including the requirements for products with sustainability certification that very few businesses from Vietnam can meet. These standards are the biggest barrier for businesses in Vietnam.
The expanding export market has created a wave of investment in the production of this item in Vietnam, especially from the second half of the year. However, the market has passed the "fever" period, with export prices falling rapidly, which can have a substantial negative impact, especially for new or under-construction factories. According to unofficial statistics from some enterprises in the industry, in 2022, about 70 tablet factories will be built.
Among these 70 factories, about 20 large factories use EU technology; 50 factories use Vietnamese and Chinese technology. Currently, the export price of wood pallets is decreasing, and the price of input materials after a period of "fake fever" has also decreased but is still at a high level. Bank interest rates are at a high level. Factories that have been or are in the process of being completed but have to use bank loans are currently under great pressure. Factories without capital, especially small-scale ones, may be at risk of closure. Therefore, according to some businesses, 2023 may be a year of purification for businesses in the industry.
(Source: https://wtocenter.vn/tin-tuc/21574-export-of-wood-pellets-under-downward-pressure )
Contact to receive product information and quotation:
#worldexport #pellet #powder #sawdust #rubber #mixed #wood #fsc #pine #acacia #quality #export #vietnam #premium #vietnam
___________________________
📞 +84 932 632 317 (WhatsApp/KakaoTalk)
📩 info@worldexport.com.vn
📮 www.worldexport.com.vn
📍No. 21, Street 10, Song Da Zone, Hiep Binh Chanh Ward, Thu Duc City, HCMC
