Timber and forestry product exports: Why are they still facing the problem of unsustainability?

In the first 10 months of 2024, wood and forestry product exports reached 14.05 billion USD, an increase of 19.9%, however, this billion-dollar industry still faces the "problem" of unsustainability.

Exports earn tens of billions of dollars

According to the report of the Ministry of Agriculture and Rural Development, the turnover agricultural - forestry - fishery export October 2024 is estimated at 5.91 billion USD. Thus, the total export turnover of agriculture, forestry and fishery products in 10 months reached 51.74 billion USD, an increase of 20.2% over the same period in 2023. Particularly for wood and forestry products, in the first 10 months of 2024, exports reached 14.05 billion USD, an increase of 19.9%; export surplus was 11.75 billion USD, an increase of 18.8% over the same period in 2023.

In the first 10 months of 2024, wood and forestry product exports reached 14.05 billion USD, up 19.9% over the same period last year. Photo: NH

In addition to the achieved results, according to experts, wood and forest product exports are also facing the problem of unsustainability. Mr. Nguyen Tuan Hung - Department of Forestry Processing and Trade - Department of Forestry (Ministry of Agriculture and Rural Development) - said that the impact of global fluctuations, fluctuations such as epidemics (Covid-19), natural disasters, especially political conflicts in the world have caused disruptions in the supply chain, escalating fuel and transportation costs, causing the price of imported raw wood to increase sharply, promoting the wood processing industry to switch to using domestic raw wood to reduce dependence on imports.

In addition, Vietnam currently exploits more than 20 million m³ of wood from production forests each year, meeting about 75% of the raw wood demand of the wood processing industry. However, about 70% of this wood is small wood, only suitable for the production of wood chips and wood pellets, not suitable in terms of quality and product specifications for deep processing and processing of high-end export wood products.

The markets wood export and Vietnam's main wood products such as the United States, the EU, Japan, South Korea, and China (accounting for more than 90% of Vietnam's wood and forest product export value) are increasingly applying strict regulations on legal wood, and requiring sustainable forest management certification. Therefore, to maintain and expand these export markets, developing raw wood sources from certified forest areas is a prerequisite.

However, the cost of developing a sustainable forest management plan and issuing forest certificates is quite high, especially for smallholder farmers in remote areas. Currently, the country has more than 1 million forest owners, managing over 45.5% of the production forest area (equivalent to 1.82 million hectares), who have limited financial resources and find it difficult to mobilize capital on their own to issue sustainable forest management certificates.

Need to strengthen linkages and develop sustainable raw material areas

Regarding the development of large-scale timber production forests, up to now, the whole country has planted and converted 445,480 hectares of large-scale timber plantations. Of which, the provinces in the North Central region have reached 234,847 hectares, the highest in the country, accounting for 52.7%. This region also has nearly 105 thousand hectares of forests certified for sustainable forest management, accounting for nearly 20.4% of the certified forest area in the whole country.

The North Central region also ranks second in the country in attracting businesses to cooperate and associate with forest owners to invest in planting large timber production forests, with sustainable forest management certificates, only after the Northeast region, but the development is not commensurate with the region's potential.

Specifically, the area of large timber forests with sustainable forest management certificates due to cooperation and association between enterprises and forest owners only accounts for over 3.5% of the planted forest area of the whole region, 44% of the forest area with sustainable forest management certificates of the whole region.

The development of cooperation, association, and investment in planting large timber production forests with sustainable forest management certificates in the North Central region still faces certain difficulties and problems. Accordingly, not many businesses are interested in cooperating and associating with forest owners to invest in planting large timber production forests with sustainable forest management certificates and to purchase products. At times, the selling price of wood with sustainable forest management certificates is not much different from that of wood without sustainable forest management certificates, not commensurate with the cost of obtaining sustainable forest management certificates;...

In addition, there are difficulties in land and infrastructure. Accordingly, the land area has been allocated to small households, making it difficult to create large raw material areas, causing difficulties in purchasing and transporting to the processing site.

Land accumulation to have a large enough scale for commodity production is difficult to implement due to regulations on land limits; people still have the mindset of doing small-scale business, lacking long-term and sustainable connections. Forestry planning is still limited, land allocation is still in a state of dispute and overlap, causing difficulties in developing the planning area for forest plantation development to produce raw wood.

Borrowing capital from banks is still difficult, the loan period is short, and collateral is required, so businesses and households have difficulty accessing loans. The funding source supported by the state budget according to current policies has not met the practical needs. The current policy of linking the development of raw material areas and purchasing forest products has not encouraged businesses and people to participate.

In the current world context, cooperation and investment linkage in developing large-scale timber production forests with sustainable forest management certification is an inevitable and very necessary trend for the wood processing industry. "Developing large-scale timber production forests with sustainable forest management certification is a way for Vietnam to not only proactively source raw materials but also meet increasingly stringent requirements from import markets," said Mr. Trieu Van Luc - Deputy Director of the Department of Forestry.

To attract cooperation and linkage in planting large timber production forests with sustainable forest management certificates, experts recommend that localities need to review and continue to improve mechanisms and policies, and at the same time effectively implement support policies to create conditions and attract businesses and forest owners to participate in cooperation and linkage in investing in planting large timber production forests with sustainable forest management certificates.

In addition, promptly evaluate and summarize effective cooperation and investment linkage models for large-scale timber plantation with sustainable forest management certificates, as a basis for replication. Promote the organization of conferences, fairs, exhibitions, etc. to promote products and encourage economic sectors to participate in cooperation and investment linkage in large-scale timber plantation with sustainable forest management certificates associated with processing and export markets.

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