Vietnam's Wood Export Landscape Transforms: Wood Chips and Pellets Drive Growth, Furniture Exports Face Pressure

The global timber trade map is undergoing a new round of reshaping, with structural changes in Vietnam’s wood exports drawing significant industry attention. A recent market report released by the International Tropical Timber Organization revealed that in the first half of 2026, Vietnam’s wood exports showed a clear divergence—wood chips, pellet fuels, and industrial panels accounted for all export growth, pushing total exports to $8.54 billion, a modest 4.4% increase year-on-year. In contrast, deep-processed furniture products—the traditional backbone of the sector—saw their export value decline by 2.7%. As a result, Vietnam’s export engine is rapidly shifting from finished furniture toward upstream raw materials.

Reconfiguring Export Structure: Raw Materials Lead, Core Finished Products Cool

An industry assessment by Nguyen Quoc Khanh, Chairman of the Vietnam Wood and Forest Products Association, clearly outlines the transformation trajectory of Vietnam’s wood exports. Data shows that wood chips, pellet fuels, and industrial panels have become the absolute drivers of export growth, while long-standing core manufactured goods—deep-processed products—have not only failed to maintain momentum but have actually contracted. This marks a fundamental shift in the growth logic of Vietnam’s timber industry.

Market trends provide strong evidence for this change. In the first five months of this year, Vietnam’s wood export markets underwent a significant realignment: shipments to the United States—a traditional key market—fell by 8% year-on-year, while purchases from China surged by 49%, completely reversing the previous growth focus. This shift precisely aligns with the product structure adjustment: the U.S. was previously Vietnam’s primary destination for finished furniture, whereas China now focuses on unprocessed fiber-based raw materials. Meanwhile, Japan maintained moderate growth at 5.1%, while the Netherlands led among major export destinations in terms of growth rate, and South Korea recorded the steepest decline. Global demand preferences for Vietnamese timber are accelerating their fragmentation.

Industry Reflection: Moving Beyond "Extensive Export," Focusing on Profitability and Sustainability

“The industry’s goal is no longer merely pursuing export volume, but achieving profitable and sustainable exports,” emphasized Nguyen Quoc Khanh during an industry seminar in Ho Chi Minh City in October—an outlook fully aligned with subsequent strategic directions set by the association. Against the backdrop of imbalanced growth structures, Vietnam’s timber industry is increasingly urgent about improving development quality.

Monthly data from Vietnam’s Ministry of Agriculture and Rural Development shows that wood exports reached $1.53 billion in June, with the government maintaining its annual export target of $19 billion. In terms of market share, the U.S. still holds nearly half of Vietnam’s exports, followed by China and Japan with 15% and 12.9% respectively. Among subcategories, pellet fuels stood out, surpassing $1 billion in export value for the first time in 2025, accounting for 7% of total industry exports—an increase of 2.2 percentage points over the prior year, with Japan and South Korea capturing almost the entire export share. Wood chips, the second-largest contributor to growth, remain primarily targeted at China, further highlighting the sustained advantage of raw material exports.

A sober internal diagnosis further underscores the necessity of transformation. At a forum in Hanoi in July, Wu Si Huai, Secretary-General of the Vietnam Wood and Forest Products Association, frankly stated that while global demand for furniture, green building materials, and high-tech wood products continues to rise, Vietnam remains trapped in exporting large volumes of low-value-added raw materials. He urged the industry to abandon the “plant more, harvest more” extensive model—an argument echoed by the association’s May findings showing that original equipment manufacturers earn only 5–6% profit margins, underscoring the urgency of industrial upgrading.

External Challenges and Internal Bottlenecks: Navigating Dual Pressures

At a critical juncture for industry transformation, shifts in the external trade environment add new challenges. In July, the U.S. Department of Commerce significantly reduced its final anti-dumping duty rate on Vietnamese hardwood and decorative plywood by more than half, bringing it down to 90.12%. However, the full implementation of this ruling still depends on a damage determination vote by the International Trade Commission before September 4, meaning trade barriers facing Vietnam's timber exports remain only partially lifted.

Domestic bottlenecks have become the core constraint limiting industrial upgrading. A lagging certification system remains the biggest obstacle preventing Vietnam’s timber industry from moving up the value chain. Currently, out of nearly 4.9 million hectares of planted forests in Vietnam, only 868,000 hectares have received sustainable forest management certification—most of which are short-rotation acacia trees (4–6 years), insufficient to meet quality requirements for deep processing. Meanwhile, the pilot program for regional coding of production forests covers just 25,500 hectares across five northern provinces, leaving a long way to go before a large-scale, standardized raw material supply system is established.

Breaking the deadlock: Rebuilding the industry ecosystem toward 2030 goals

Faced with dual pressures from within and outside, Vietnam’s timber industry has clearly defined its path forward. Pham Trung Nghia, Vice Chairman of the Vietnam Chamber of Commerce and Industry, emphasized that to achieve the government’s export target of $25 billion by 2030, the sector must completely move away from reliance on short-rotation timber and imported raw materials, instead focusing on cultivating large-diameter timber suitable for deep processing to lay a solid foundation for industrial advancement. Nguyen Van Thien, Deputy Director General of the Vietnam Forestry and Forest Protection总局, further stressed that the key to transformation lies in shifting from mere timber exports to exporting furniture ecosystems and building local brands, thus creating a more competitive industrial ecosystem.

Changes in market demand are also accelerating industry transformation. Bui Thi Nha Trang, Manager of the Sustainable Development Team at SGS Vietnam, noted that global forest product trade is transitioning from a “trust-based” model to an “evidence-based” one. Buyers no longer accept verbal assurances but now demand complete traceability, sustainable management, and carbon accounting documentation—posing higher standards for standardization and transparency in Vietnam’s timber operations.

The profound reshaping of Vietnam’s timber export landscape reflects both evolving global market demands and changing trade environments, as well as the industry’s proactive pursuit of high-quality development. From short-term growth driven by raw material exports to long-term strategic restructuring of the entire industry ecosystem, Vietnam’s timber sector stands at a critical turning point. Its development trajectory will serve as a significant reference for redefining the global timber trade landscape.

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