1. Forecasting the wood pellet export market
The Vietnam Wood and Forest Products Association cited data from the General Local Customs Department as saying that in 2021, the amount of compressed pellets exported from Vietnam will reach 3.5 million tons with a turnover of more than 413 million USD. In the first 6 months of 2022, export volume reached nearly 2.4 million tons with a turnover of 354 million USD. If the current growth rate is maintained, export turnover for the whole year 2022 could reach less than 700 million USD. In the future, pellets have the potential to be included in the group of exported agricultural and forestry products with an export turnover of over 1 billion USD.
Analyzing this issue, Mr. To Xuan Phuc - policy analyst of Forest Trends Organization - assessed that Vietnam's pellet export volume and value only really increased steadily from October 2021. The first half of 2022 (except February 2022, which coincides with the Lunar New Year in Asia) recorded a sharp increase in both export volume and value.
In April 2022 alone, Vietnam's pellet export turnover reached more than 530 thousand tons, worth more than 80 million USD, equivalent to more than 15% of 2021's export volume. All other months have export volume. average over 300,000 tons.
Notably, the current export price of pellets has also increased very sharply, jumping to an average of nearly 150 USD/ton, equivalent to an increase of more than 27% compared to the average price in 2021.
The quantity and price of exported pellets have increased sharply in recent times, mainly due to the sudden increase in demand for pellets in EU countries. The reason is that EU countries turned their backs on gas sources from Russia when the Russia-Ukraine conflict broke out, which was imported to serve heating needs.
Imported pellets are being used to replace this lost gas supply. Demand and price of pellets in the EU market have increased, creating attraction from large supplies, especially from the US - the largest pellet exporting country in the world. Although Vietnam is not a large pellet supplier to EU countries, rising demand and pellet prices in the international market create opportunities for the Vietnamese pellet industry to expand production and export.
2. Opportunities of the pellet industry
Commenting on Vietnam's pellet export market, according to experts, nearly 100% of Vietnam's pellets are exported to Japan and Korea. The amount exported to the remaining markets is insignificant. Before 2018, the proportion of Vietnam's pellets exported to Korea was much larger than that of Japan. However, the difference gradually narrowed after that.
Specifically, the import volume of the Japanese market only started to increase sharply from 2018. This is also the time when the import demand of both markets increased dramatically (Japan increased 3 times, Korea increased more than 3 times). 1.5 times) due to preferential policies on biomass electricity purchase prices, wood pellets are an important fuel source to convert from coal-based power sources to clean electricity.
The Japanese market continues to maintain very high growth momentum at an average of over 90% in the next period (2019-2021). In 2022, it is expected that Japan will continue to increase the amount of pellet imports from Vietnam to a level approximately equal to that of Korea.
Meanwhile, according to the Vietnam Timber and Forest Products Association, the number of enterprises participating in export has increased rapidly since 2021. In the first 6 months of 2022, the number of export enterprises increased sharply. The number of enterprises participating in exporting has increased rapidly, showing the attractiveness of this industry in recent times.
Demand for pellets in the world is increasing, especially in the EU market. Vietnam's pellet industry is facing a great opportunity to expand production and export. However, Mr. To Xuan Phuc assessed that there are still some factors that have a direct impact on the sustainability of the industry. This requires businesses in the industry and current policy mechanisms to make adjustments in the future.
(Source: congthuong.vn)
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