Vietnam Forestry: Support for Agricultural Products

While agricultural products decreased in both volume and value in both domestic and export markets, forestry has kept staging continued steady growth to support Vietnamese agricultural products.

At the preliminary review for the first six months of 2019, Minister of Agriculture and Rural Development Nguyen Xuan Cuong stressed that 2019 is a challenging year as the new world economic landscape has greatly impacted the agricultural sector, and this challenge has been identified by the ministry from the end of 2018. For the forestry sector, this is a turning point, from a country with only about 20% forest cover coefficient which has reached nearly 43%. In particular, the forestry sector has transformed into a forest economy with the Forest Law that has most advanced regulations ever.

According to Minister Nguyen Xuan Cuong, timber and forest product exports were estimated to reach US$11 billion in 2019, helping generate jobs and ease pressure on slowing livestock farming and cultivation, and achieve the growth and export target of the whole industry. In addition to having 4,500 wood processors, Vietnam is still endowed with much potential in medicinal materials that can generate billions of U.S. dollars if effectively tapped. This is the direction that the forestry sector needs to determine to get sustainable development steps.

Besides, it is necessary to remove trade barriers: Actively and proactively meeting, working and negotiating market opening and removing difficulties in woodwork import and export in the United States, Australia and New Zealand, Japan and South Korea; providing information on Vietnam's wood processing industry and Vietnam's regulations on legal timber; strengthening cooperation with multilateral and bilateral MOUs; proactively providing legal information, market information on timber and forest products globally to support Vietnam's importers and exporters; preparing to implement the Voluntary Partnership Agreement (VPA) on  Forest Law Enforcement, Governance and Trade (FLEGT) between Vietnam and the European Union (EU) as well as cooperation commitments to address illegal logging and sustainable wood industry development; developing the domestic market; and cooperating with enterprises to make Vietnam a world-leading well-branded, well-reputed producer, processor and exporter of timber and non-timber forest products.

Mr. Pham Van Dien, Deputy General Director of the Vietnam Administration of Forestry under the Ministry of Agriculture and Rural Development, said that the export value of forest products has increased steadily in the last six months, growing at approximately 20% year on year. The six-month export value was projected at US$5.23 billion, fulfilling 50% of the target set for the year 2019 and taking trade surplus of nearly US$4 billion. 87% of Vietnam’s exported wood products are shipped to traditional markets (the United States, Japan, the European Union (EU), China and South Korea) which have strict requirements for product quality, design and traceability. Thus, Vietnam continued to affirm the prestige of its wood and forest products in the international market and maintain its leading position in Southeast Asia, second in Asia and fifth in the world by forest product exports. In addition to shipping its products to over 120 countries around the world, Vietnamese furniture is returning to the domestic market, closely linked to forest workers, businesses and consumers, creating a direct impetus for forestry production to form a link chain in the spirit of the 2017 Law on Forestry Law. In addition, the forestry sector posed a 4.32% growth in the first quarter of 2019 and 4.53%, 0.08% in the second quarter of 2019, marginally 0.08% higher than the same period in 2018. However, due to complicated weather developments in the first six months of 2019, forest fires flared in northern and central provinces. Up to 156 forest fires were seen in the period, an increase of 61 cases (up 64%) compared to the same period in 2018, burning ​​930 ha of forests, an expansion of 705 hectares (more than 4 times in the same period in 2018). During the peak period of forest fires from June 26 to July 1, 2019 in central provinces, 45 fires burnt forests in Nghe An, Ha Tinh and Quang Binh, Quang Tri, Thua Thien Hue, Da Nang, Quang Nam, Quang Ngai and Phu Yen. An estimated 293 ha of forests was burned (14 cases have not completed calculating the damaged area).

Regarding forest development, the country planted 108,456 ha of forests in the first 6 months of 2019, fulfilling 51% of the yearly plan and rising 2% from a year earlier. Of the sum, protected and specialized forests accounted for 1,959 ha, 5% more than a year ago; and commercial forests covered 106,497 ha, 3% more than the same period of 2018. In commercializing forests, in the first six months of 2019, Vietnam harvested 105,000 ha to take 9.7 million cubic meters of timber, equivalent to 49.7% of the plan for 2019 and up 4.86% year on year. Particularly, the value of forest product exports reached US$5.23 billion in the first six months of 2019, up 20% year on year and fulfilling 50% of the yearly plan. The timber import value was projected at US$1.25 billion from January to June, up 16% year on year, he added.

Vietnam’s forestry is being restructured with four specific action plans to improve productivity and quality of planted forests; increase the value of processed products; develop economic cooperation and product value chains; and develop the market consistent with market trends and needs to complete the forestry development strategy in 2006 - 2020 soon. The sector is formulating mechanisms and developing many effective models for planting and managing standard forests, increasing profits for forest growers and processors, enhancing quality, efficiency and competitiveness of the sector in the context of integration and sustainable development.

Minh Ngoc