That is information at the conference of the Vietnam International Furniture & Home Accessories Fair (VIFA-EXPO), the biggest international furniture fair in Vietnam and one of the biggest furniture fairs in South-East Asia, which will take place from August 31 to September 3 in Saigon Exhibition & Convention Center (SECC) in Ho Chi Minh City’s District 7.
Mr. Nguyen Chanh Phuong, Vice Chairman of Ho Chi Minh City Handicraft and Wood Industry Association (HAWA) pointed out the main reason that the key export markets such as the US and Europe are facing many difficulties due to the impact of the conflict between Russia and Ukraine. Plus, high inflation in many countries has made consumers tighten their spending, leading to a decrease in demand for unnecessary products including wood products and furniture.
According to Mr. Phuong, another reason is that the world's importers have not calculated correctly, so, over the past time, commodity congestion with a large amount is at warehouses and ports abroad and in Vietnam. It takes three or four months even 12 months to tackle the inventory of commodities.
Prior, the Ministry of Agriculture and Rural Development announced that China - one of the three largest importers of wooden furniture products in Vietnam - still thoroughly applied the Zero Covid policy. These factors interacting with each other reasons have led to supply chain disruptions, increased production costs due to increased raw materials, and transportation costs.
In particular, the decline in the export of wood and wood products to the United States - the largest export market of Vietnam's wood and wood products – affects the industry’s export turnover. In addition, the wood industry also faces the initiation of an investigation by the US Department of Commerce (DOC) with wooden cabinets and dressing tables resulting in a decrease in orders and high inventory.
According to HAWA, however, the market also has positive signals. Many domestic construction projects are starting well. Furthermore, Japan, Korea, and Australia have still placed stable orders in the luxury segment. In addition, from next September, there will be new orders for the year-end shopping season around the world.
Mr. Nguyen Chanh Phuong said that VIFA - EXPO 2002 is organized at a suitable time for meetings between manufacturers and importers that will exchange and sign contracts or memorandum of understanding for the future. Wood processing enterprises expected that the export prospect will be brighter in the spring of 2023. The wood processing industry has grown for a long time since 2009, so the current difficulties are also a break for businesses to review the order structure, and their market, and rearrange production.
The Ministry of Agriculture and Rural Development forecasts that this year’s export turnover of wood and wood products may reach $16.3 billion and it was $10.3 billion as of July.