Vietnam’s Wood Export Growth Now Comes from Chips, Not Furniture

China bought 49 per cent more Vietnamese wood over five months while the United States took 8 per cent less, with deeply processed exports falling 2.7 per cent.

A three-wheeled cart delivers acacia poles to a Vietnamese chip mill, feeding the low-value product class that has carried nearly all of the country's wood export growth through a first half worth $8.54 billion. (Photo Credit: Thanh Nguyen, Pulitzer Center)

Woodchip, pellets, and industrial panels have accounted for nearly all of Vietnam’s wood export growth through the first half of 2026, with the total reaching US $8.54 billion, up 4.4 per cent, while the deeply processed manufactures at the industry’s commercial core contracted 2.7 per cent. That is according to Nguyen Quoc Khanh, Chairman of the Vietnam Timber and Forest Products Association, whose assessment of the first half of the year the International Tropical Timber Organization published on Monday in its fortnightly market report.

Shipments into the United States fell 8 per cent across the first five months, while China bought 49 per cent more, relocating Vietnamese growth from the market that absorbs its manufactured furniture towards the market that absorbs its unprocessed fibre. Japan added 5.1 per cent over the same period, with the Netherlands registering the fastest acceleration among the major destinations and South Korea the sharpest contraction.

“The industry’s goal is not merely to export, but to export profitably and sustainably,” Khanh told a Ho Chi Minh City seminar in October, two months before the association elected him to its chair.

Monthly statistics from the Ministry of Agriculture and Environment record June exports at $1.53 billion, with the government maintaining a $19 billion target for the year. The United States still absorbs nearly half of the total revenue, China 15 per cent, and Japan 12.9 per cent.

Pellet manufacturers surpassed a billion dollars for the first time in 2025 and now hold 7 per cent of the sector’s export value, up from 4.8 per cent twelve months earlier, with Japan and South Korea purchasing nearly the entire trade. China has long been the dominant destination for Vietnamese woodchip, the second product class carrying this year’s growth.

Workers assemble furniture components on a Vietnamese factory floor, the deeply processed segment that contracted 2.7 per cent across the first half, while woodchip, pellets, and panels carried the growth. (Photo Credit: VNA/TTXVN)

The diagnosis has come from within the industry, with Ngo Sy Hoai, Secretary General of VIFOREST, telling a Hanoi forum on 23 July that Vietnam continues to export large volumes of low-value raw materials while global demand grows for furniture, green building materials, and high-technology wood products. Hoai wants the sector to move past what he called “planting more to harvest more”, an argument the association has run since May, when it counted original equipment manufacturer margins at 5 to 6 per cent.

It comes as the US Department of Commerce more than halved its final antidumping determination on Vietnamese hardwood and decorative plywood to 90.12 per cent in July, a ruling that now depends on an International Trade Commission injury vote scheduled by 4 September.

Certification remains the binding constraint on any progression up the value chain, with 868,000 hectares carrying sustainable forest management certificates out of nearly 4.9 million hectares of planted forest, most of which is short-rotation acacia cut on four- to six-year cycles. A pilot scheme for production forest area codes extends to just 25,500 hectares across five northern provinces.

Reaching the government’s $25 billion export target by 2030 requires the industry to abandon short-rotation timber and imported raw materials, according to Bui Trung Nghia, Vice Chairman of the Vietnam Chamber of Commerce and Industry, who wants large-diameter timber suited to deep processing. Nguyen Van Dien, Deputy Director General of the Vietnam Forestry and Ranger Administration, put the same case, arguing that it is a move from exporting timber to exporting furniture ecosystems and Vietnamese brands.

Buyers have started demanding proof rather than assurances, with Bui Thi Nha Trang, Sustainability Team Manager at Control Union Vietnam, describing a global forest-products trade moving from a “trust-based” model to an “evidence-based” one requiring traceability, sustainable management, and carbon accounting.

Source: https://woodcentral.com.au/vietnam-wood-export-growth-woodchip/