Young forest for sale, high price but still a loss

In recent days in Tuyen Quang, the purchase price of wood chips ranged from VND 1 million to VND 1.2 million/ton. This is the highest price ever because a few months ago the purchase price was only between 700-800,000 VND/ton. The high price of wood chips prompted many households to massively sell young forests.

In Deo Tuong Village, Tien Bo Township, Yen Son District, a number of families selling new forest timber aged 5 to 6 years have emerged. For example, Ms. Ngo Thi Mo’s household sold 16 ha for 900 million Dong; Mr. Vu Van Manh’s family sold more than 3.9 ha and earned nearly VND 600 million; Mr Pham Van Khanh’s family sold 1 hectare for about VND 100 million…

Households selling young forest are aware that the economics of planting large timber forests will be higher than conventional afforestation, but this model is only suitable for families who have conditions or have other jobs. Households that depend on forestry face difficulties. So when they see that the wood chips are cheap, there are people who buy them, so they have to sell them.

The sale of old-age forests is not only taking place in Tien Bo Municipality, but also in many places in Chiem Hoa and Son Duong districts. Lap Tien Municipality (Son Duong District) has more than 900 ha of production forest, of which more than 800 ha have obtained FSC certificate.

Mr. Nguyen Hoang Giang, chairman of the Lap Tien Municipality People’s Committee, said that about two months ago, the price of buying wood as a raw material rose dramatically, leading some households to sell young forests. As a result, the people who have planted forests for sale lose out, because at this stage the wood is still young and in the prime development phase in terms of biomass.

However, this sale of young forest does not take place en masse in households and villages, but only in households with difficult economic circumstances that need money for subsistence or in poor forest areas. Most households with limitations are aware of the value of turning perennial forests into large timber forests that enhance the value and quality of the wood.

According to the analysis of export timber processing companies, selling forests that are only 4 to 5 years old is nothing more than “eating out”, and although the price of raw wood is very high, the profit is actually still not high. . Because 1 ha of forest from 4 to 5 years old mainly sells wood chips, and the trunk has very little value, because the Vanh road is still small, and because the forest is still a few years old, the wood is not strong yet, so there is not much value for raw materials for processing other products.

Therefore, 1 ha of forest aged 5-6 years old can only be sold for around VND 70-80 million, while 1 ha forest aged 9 years and older earns more than VND 200 million by selling wood as a raw material for furniture processing . In addition, the stem and small branches are collected to make hashish.

Mr. Hoang Minh Son, HR and administration director at An Hoa Pulp and Paper Mill, said that the main source of raw materials purchased by the company is currently the purchase of chips. The company still keeps the same price at 2.5M/ton at 100 dry content, for straight cut raw materials at 50 dry content the purchase price is 1/2 of the above price. The company always follows the market price, ensures that people are not disadvantaged and yet secures the sources of raw materials for the unit’s production activities.

The increase in the purchase price of wood chips also affects the company’s production activity, but not too much. Currently, the price of wood chips is only about 40% of the price of the piece of flour, the rest is made up of other materials.

Do not sell young forest

Vu Van Hoe’s family from Deo Tuong Village, Tien Bo Township, Yen Son District, has been making a living from forestry for more than 20 years and earning their fortune. After spending 3 forest cycles on harvesting, he has enough experience to realize that the older the forest, the larger the volume, the greater the economic value. As a result, Mr. Hoe is one of the first households to apply for FSC certification for his family’s forest.

Mr. Hoe said that in the recent high-price forests, his family also sold 2 hectares of timber forest and made a profit of more than 400 million dongs. This is a big turnover after a long period of cheap raw wood due to the impact of the Covid-19 epidemic. Immediately after harvesting this area, Mr. Hacke worked on the vegetation to prepare for the new afforestation.

Currently, Mr. Hoe’s family owns 10 hectares of forest which is 5 years old. This forest area also has merchants who want to buy wood chips at a high price, but he doesn’t sell. Because he knows that this is the time when the forest grows and develops best, just taking care of the forest in 3 more years will double the value of the forest ready to be exported to the most demanding markets like Europe.

Like Mr. Hoe, many FSC-certified forest households in Tien Bo Municipality agree not to sell young forests, as doing so brings only short-term gains at the expense of long-term gains. In particular, the issue of stabilizing raw material areas for large furniture manufacturers, as well as the obligation to make FSC certified forests, local large timber forests and the Tien Huy Cooperative.

The fact that people will try to sell young woods when the price of wood chips is high will result in wood processing factories running out of large wood materials for making furniture. Large wood processing companies are currently very concerned about this problem. In the past, in the production of peeled wood or wood, wood products were often carefully filtered, leaving small wood chips, but due to high prices, households have not carefully filtered, which meant that the source of raw materials will also serve wood processing factories will be narrowed.

According to Mr. Vu Hai Bang, Chairman of the Board of Woodsland Joint Stock Company, the wood industry market has seen many changes recently. Demand for plywood falls because it was not exported to the US market. Meanwhile, the price of wood chips has risen due to cheap exports to Japan and China, so companies that compete directly with wood chip materials will be hit the hardest. Especially the units that make pellets, energy, materials to make MDF…

Mr Bang warned that the mass exploitation of young forests with high wood chip prices will have very dire consequences for the future of the timber processing and processing industry. Therefore, if not well controlled, large areas of wood materials for processing may become scarce in about 3 to 5 years. Since acacia wood can be sawn, it must be at least 7 years old to have a high value in wood processing, so it will affect the interests of many parties. Another problem is that the wood processing industry will create more jobs and a much higher export value than the production of wood chips.

At present, the total forest area of ​​Tuyen Quang Province is more than 422,400 ha, of which the area of ​​timber plantations is over 140,700 ha; Tuyen Quang province’s forest cover rate reaches more than 65%, ranking third in the country.

Tuyen Quang province aims to become a typical sustainable forestry province by 2025. Across the province, more than 30% of the planted production forest area is certified for sustainable forest management; The average harvesting capacity of planted forests is 1.1 million m3 of wood/year…

In the period from now to 2025, Tuyen Quang Province aims to develop another 20,000 ha of large timber forests, bringing the total area of ​​large timber forests in the province to 89,000 ha.