Last updated: 07 March 2020

Profile

Profile

Forestry and legality

Source
Region South-eastern Asia (2019) UNSD
FLEGT status VPA implementing (2019) FLEGT Facility
Forest area 14.8 million ha (2015) FAO
Deforestation rate -0.13 million ha/year (2010-2015) FAO
Planted area 3.663 million ha (2015) FAO
Tree cover loss 2.64 million ha (2001-2018) Global Forest Watch
Tree cover loss (%) 16 % (2001-2018) Global Forest Watch
Tree cover gain 564 kha (2001-2012) Global Forest Watch
FSC certified area 199,018 ha (December 2019) FSC
PEFC certified area 0 ha (December 2019) PEFC
Double certified area (FSC & PEFC) 0 ha (Mid-2019) FSC & PEFC


VPA status of Viet Nam

  • Viet Nam began negotiations with the EU in 2010 and signed a VPA in 2018. The agreement entered into force in June 2019.

  • The terms of the VPA were enshrined in Viet Nam’s new forestry law which came into force in January 2019. The new law includes a commitment from the government to further increase cooperation in forestry with foreign partners to strengthen environmental protection and help meet sustainable development goals, climate change and other international commitments.

  • Viet Nam published a plan in December 2018 with the objective of implementing a fully operational Timber Legality Assurance System (VNTLAS) by 31 December 2020. The plan is acknowledged to be ambitious and time scales and activities may need to be adjusted with experience.

  • The initial plan envisaged completion within only 2 years of all required activities under the following headings: development of legislative documents and guidelines; establishment of technical infrastructure for VNTLAS operation; capacity building for relevant stakeholders; communications; implementation, monitoring and evaluation of the Agreement; and connecting activities supporting the VPA/FLEGT implementation regionally and internationally.

  • Viet Nam is not only a significant timber producer but also a major regional processing hub, importing wood from over 80 countries, tropical and temperate. VNTLAS will cover both domestically produced wood and imports.

  • Vietnamese operators will have to undertake due diligence on imports, assess the risk of illegality and undertake mitigation measures if necessary. There is potential for this to create a legality assurance ripple effect across the wide range of countries supplying Viet Nam.

Forest resources in Viet Nam

  • According to the World Resources Institute large areas of Vietnam’s forests were degraded, deforested, or defoliated following the conflicts of the mid-20th century. As a result, Vietnam embarked on a national afforestation program in 1987.

  • According to the FAO 2015 Forest Resource Assessment, forest area in Viet Nam increased from 9.4 million hectares in 1990 to 14.8 million hectares in 2015. Plantation area increased from 970,000 hectares to 3.66 million hectares during the same period.

  • Using the Vietnamese official definition, the total forest area in 2018 was 14.4 million hectares, with natural forest at 10.2 million hectares and plantations at 4.1 million hectares.

  • Vietnam is currently the only country in the Mekong region to have reported a continuous increase in forest cover over the last three decades. By 2030, the Vietnamese government aims to stabilize the natural forest area to at least equal the area achieved in 2020 and increase the national forest coverage to 45% of land area.

  • While forest area is increasing, concerns remain over the overall quality of forests, evident from very low biomass stocks. An estimated 33% of Vietnam´s forests are degraded and of poor quality having been degraded due to over-harvesting, agricultural conversion and the resulting overuse of soils. Only 8% of the forests in Vietnam are still classified as “rich and medium rich natural forests” (UNIQUE, 2017).

  • In 2014, the government imposed a logging ban in most natural forest areas, a regulation which was extended nationwide in 2017. Since then all commercial wood supply has been derived from plantations and imports.

  • Viet Nam’s plantations consist mainly of fast-growing species including eucalyptus, acacia, pine, together with some rubberwood and native species.

  • Supply from plantations is highly fragmented with between 60% and 70% derived from small household producers. Around 80% of plantation supply comprises small diameter wood suitable only for wood chips and MDF.

  • As a result, Viet Nam is heavily dependent on imports for wood supply, particularly of larger diameter logs and higher value and decorative species and panel products.

Industry

Industry

Economic and industrial status

Source
GDP 244.9 billion USD (2018) World Bank
Population 95.5 million (2018) World Bank
Income group Lower middle income (2019) World Bank
Ease of Doing Business (EDB) Rank 70 / 190 (2019) World Bank
Global Competitiveness Index Rank 67 / 141 (2019) World Economic Forum
Liner Shipping Connectivity Index 66.5 (maximum value in 2004 = 100) (2019) World Bank


Timber industry competitiveness of Viet Nam

  • Viet Nam’s role as a wood processing hub continued to rise during 2018. Viet Nam is increasingly recognised as the primary location in South East Asia for supply of mid-range interior furniture and has become a major competitor to China in this sector.

  • The on-going trade war in 2018 and 2019 between the US and China is creating some new export market opportunities but is not without risk for Viet Nam.

  • The US import tariffs imposed on Chinese wood products increases the competitiveness of Vietnamese wood products in that market and has led to a surge in investment in Viet Nam, particularly by Chinese manufacturers anxious to avoid the tariffs.

  • However, this in turn is increasing US scrutiny of Viet Nam’s own export promotion regime with claims already circulating, according to the Wall Street Journal and Bloomberg, that some Chinese goods imported into the US are being transhipped through Viet Nam and misdeclared as originating in the country. The US Customs and Border Protection are understood to have begun investigations of Vietnamese plywood exports during 2018.

  • Rapid inward investment brings other challenges, including escalating land and labour costs, bottlenecks at ports, and traffic jams on roads implying saturation in some parts of Viet Nam and raising questions on whether the current pace of export growth can be sustained.

  • Viet Nam’s performance against various international competitiveness indices has been mixed in recent years. The country’s ranking on the World Economic Forum’s Global Competitiveness (GC) index increased from 70th in 2013 to 60th in 2017 but subsequently dropped again to 77th in 2018. On the GC, Viet Nam scored lower than Malaysia, Thailand and Indonesia. On the World Bank’s Ease of Doing Business index in 2018, Viet Nam (69th) ranked slightly higher than Indonesia (73rd) but significantly lower than Malaysia (15th) and Thailand (27th).

  • Viet Nam’s Connectivity Index ranking (19th) was unchanged in 2018 and remains significantly lower than China and Malaysia but is higher than India, Thailand and Indonesia.

  • IMM survey work indicates that the Vietnamese furniture industry is regarded by EU importers as technically more evolved than most other Asian producer countries and increasingly able to supply products to high European quality standards.

Trade Overview

Trade Overview

Highlights

  • Vietnam’s domestic wood products consumption is valued at around US$2.8 billion per year, equivalent to only US$30 per capita and much lower than the global average of US$72 per capita.

  • Domestic consumption is expected to increase, spurred on by rapid urbanisation and recent recovery in Vietnam’s real estate market, but at present the wood industry is still heavily export-oriented.

  • Viet Nam’s exports of wood furniture, plywood, pellets and wood chips are rising rapidly.

  • In 2018, it is estimated that Viet Nam was supplied with 34.4 million m3 (roundwood equivalent) of wood products (IMM estimate drawing on Viet Nam government sources and import data compiled by Forest Trends).

  • Around 70% of supply derived from domestic plantations, while the remainder comprised imports of logs (7%), sawnwood (15%) and panel products (8%).

  • Domestic wood supply constraints have meant that Viet Nam’s imports have continued to rise from a diversifying range of countries.




Viet Nam’s imports and exports of timber products in the latest 12 months (USD value from January 2019 to December 2019)

NOTE: Mirror data from STIX, drawing on trade data reported by Viet Nam’s main trading partners, is used. Read more about the data in ‘Data Sources and Issues’.
Hover over the chart to see the value.

Imports (4,488.73 Million USD) Exports (14,546.03 Million USD)
Region Country Product Product Country Region




Viet Nam’s production, imports, exports and domestic consumption of primary wood products in 2018

(data source: ITTO) Hover over the chart to see the value.




Trend in production, imports, exports and domestic consumption of primary wood products (logs, sawnwood, plywood, and veneer) in Viet Nam

(data source: ITTO)