In the first half of 2023, the export of tablets from Vietnam to South Korea decreased by more than 40% in volume and 45% in turnover compared to the same period in 2022.

Vietnam Timber and Forest Products Association and Forest Trends just released the report “Vietnam’s Production and Export of Pellets in the First 6 Months of 2023, Current Situation and Product Production Market Trends”. According to this, in the first 6 months of 2023, the export of pellets is estimated at 1.85 million tons, with an estimated turnover of almost 300 million US dollars.

Korea and Japan are Vietnam’s two largest tablet consumption markets. The amount of pellets exported to these two markets accounts for over 95% of the total amount of pellets exported from Vietnam to all markets.

EXPORTS BACK STRONG, WHY?

According to the report’s data, the amount of pellets exported from Vietnam to Korea reached 0.65 million tons in the first five months of 2023, accounting for sales of $96.1 million, down 41% in volume and 45% in value. % of sales in the same period of 2022.

Pellets exported to Korea are mainly made from wood by-products of the wood processing industry such as sawdust, wood shavings and wood residues. Companies exporting pellets to Korea are mainly located in the southeastern region, where furniture factories are concentrated.

For Japan, the export of pellets to this market in the first six months of 2023 is estimated at about 1 million tons, with a turnover of 173 million USD, down 5.7% in volume, while the turnover is still up 19 .7% rose. in the same period in 2022.

The export of pellets to Japan requires that the wood material comes from local forests and has an FSC certificate. This material is only available in locations where there is a large concentration of planted forests in Vietnam, particularly in the central region in the north. Because of the certification requirements, Japan always pays a high price for tablets.

From 2013 to 2022, the volume and value of Vietnam’s pellet exports increased by 28 and 34 times, respectively. Vietnam has become the second largest tablet exporter in the world after the US.

According to the General Ministry of Customs, in 2022 Vietnam exported 4.9 million tons and the turnover reached $0.79 billion. In the first 5 months of 2023, the export volume reached 1.57 million tons, the turnover reached around US$256.5 million.

The Vietnam Wood and Forest Products Association stated that the price of Vietnamese export pellets to Korea and Japan fluctuated around USD 140/ton delivered in Vietnamese ports (FOB price) in the first months of 2022, in the second Half of 2022, however, rose sharply, reaching 180-190 USD/ton.

However, since the beginning of 2023 to date, the export price of tablets has fallen sharply, especially in the Korean market. While the export price to Japan still reached 145-165 USD/ton, the price of Vietnamese pellets exported to Korea fell to only 78 USD/ton in April 2023. This is a low price below the cost of production, leading some small Vietnamese tablet companies with no financial potential to stop production.

With efforts to open up the market of Vietnam Wood and Forest Products Association’s pellet division, the export price of pellets to Korea has risen again in the past two months, reaching USD 110/ton in early July 2023.

Mr. To Even small branches take off. This created a shortage of raw materials for pellets exported to Korea, driving up raw material prices and pellet production costs.

Meanwhile, Korea is currently diversifying its range of tablets. Before the Russia-Ukraine conflict broke out, Russia exported about 3 million tons of tablets to the world every year, mainly to the EU.

“However, Russia cannot currently export tablets to the EU market. In this regard, some Russian companies have to lower their export prices very cheaply in order to penetrate the Korean market. Prices of tablets from Russia’s exports to South Korea are too low, leading Korean importers to lower the price of tablets imported from Vietnam,” said Dr. To Xuan Phuc.

In recent years, the global energy crisis has also greatly increased the demand and price of pellets on the world market. This has not only led to a wave of investment in tablet production in many countries such as Malaysia, Thailand and Indonesia.

FORECAST FOR THE COMPLEX MARKET

The Vietnam Wood and Forest Products Association forecasts that the production and export situation of Vietnamese pellets will not change significantly in the last months of 2023. The price of pellets exported to Korea will increase according to the current dynamics, but still below the price at the end of last year. Meanwhile, the quantity and price of pellets exported to Japan remained stable.

Forest Trends experts believe that competition for raw materials for pellet production will continue to be intense as the export market for wood products shows no signs of recovery.

According to a long-term market analysis, Mr. To said in European countries, Japan and Korea.

In the Japanese market in particular, about 8 million tons of tablets are consumed every year, of which 40-50% are oil palm kernel shells, the rest (50-60%) are wood pellets.

On the other hand, the tablet industry has an opportunity to expand the market if consumer demand in Vietnam shows signs of rapid growth as the government makes efforts to meet its commitments to reduce greenhouse gas emissions and energy consumption. Clean, including pellets, are replacing coal in power generation. The Energy Plan 8, approved by the government on May 15, 2023, prioritized the development of renewable energy sources, including biomass power to replace high-emission coal power.

according to dr To construction. However, as the global demand for tablets is set to increase exponentially over the next decade, the production and consumption of tablets is expected to become more and more exciting.