Vietnamese acacia farmers suffer sharp drop in woodchip price

Source:
ITTO/Fordaq
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Wood and wood products exported from Vietnam comprise wooden furniture, woodchips, wood-based panels and wood pellets. In recent years, Vietnam has emerged as one of the world’s top woodchip exporters. In 2019, it exported 13 million bone dry tonnes (BDT) of woodchips, mostly to China and Japan, earning US$1.67 billion (18% of the total wood and wood product export revenue).

According to VNFOREST, Vietnam had 192 woodchip companies in 2019 with a production capacity of 14.9 million BDT. Due to the impact of COVID-19 and the consequent decline of paper demand, the price of woodchips exported from Viet Nam declined by US$15– 18 per BDT in the first eight months of 2020.

The raw material for woodchip production in Vietnam derives from about 1 million farmer households, who collectively maintain around 3 million ha of commercial acacia plantations. These farmers, who stand at the beginning of the acacia wood value chain, are bearing the losses caused by the sharp decline in woodchip price.

Consequently, many Vietnamese woodchip producers have decided to shift to plywood and laminated wood production. These further-value-added products are also expected to incentivize famers to extend rotations and produce larger logs for high-end woodworking.

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