South Africa to Become Big Market for Vietnamese Wooden Exports

South Africa was an early member of Forest Stewardship Council (FSC), a non-profit international organisation for sustainable management of forestry. As ASEAN and other countries are restricting and will eventually prohibit the exploitation of natural forest, timber import from South Africa will become crucial to Vietnamese wood-based products export. Especially when Vietnam is importing 80 per cent of its timber and the export target in 2005 is USUS$1.5 billion (over USUS$1 billion already attained in the first 9 months of 2005).

 

After 2005, wooden products imported to the US and EU must have FSC certificate. Therefore, to ensure a stable supply of timber, low production cost and a comparative edge, Vietnamese enterprises must build pre-customs storage, wood processing factories, obtain forest exploitation right and import timber from South Africa.

 

Though South Africa can export some 5 million cubic metres of timber a year, it has relatively small amount of the timber Vietnam needs to substitute Indonesian hard wood. Vietnam can import 100,000-200,000 cubic metres a year. It will help boost Vietnamese export to EU as most of the timber comes with an FSC certificate. However, the biggest difficulty is the transport fee making up 60-70 per cent of CIF price.

 

To reduce freight costs, Vietnamese enterprises must have the timber semi-processed in Africa and loaded in containers. In 2004, Vietnam imported some USUS$6.4 million worth in timber from South Africa and over USUS$5 million in the first 9 months of 2005. In the long-term, Vietnam must also import timber from other African countries such as Tanzania, Mozambique, and the Congo. In addition, Vietnam must boost its exports to South Africa to prevent the increase in the price of timber import in terms of the US dollar against the South Africa Rand.