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Viet Nam
by Akiko Oniguchi and Lyndall Bull

The evolution of trade in primary and secondary wood products in the Lower Mekong Region

Fast read

 

 

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Introducing the countries

The five LMR countries fall into two distinct camps: Viet Nam and Thailand are wood processing and export hubs; and the remaining three countries (Lao PDR, Myanmar and Cambodia) are in transition from a forest sector based primarily on the export of unprocessed timber from natural forests to a more sustainable and robust forest industry based on plantations.

China looms in the background of all countries as an important, and until the recent past, a dominant destination for wood exports from LMR countries

 

 

Regional trends

The trade of wood products in the LMR has undergone significant change over the past decade with four dominant trends.

 

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Trend One: Decreased exports of primary wood products from natural forests

 

Over the last decade there has been a dramatic plunge in export of primary wood products sourced from natural forests of Myanmar and Lao PDR. Log exports from the region totalled 3.5 million m3 and were valued at close to USD 2 billion in 2013, the peak year. Since 2017, log exports have dropped to minimal levels from both countries. These trends indicate both sustainability concerns and opportunities.

 

Unfortunately, the primary driver of the plunge in exports is likely the exploitation and depletion of the resource base, particularly of commercially valuable species such as rosewood and natural teak. Much of the commercially valuable natural forest timber may have already been extracted. Whether or not this can be corroborated with data collected from the national forest inventories may be worth review.

The observed decline in production of primary wood products from natural forests is also thanks to the effectiveness of national policies designed to decrease such trade.

In Myanmar, a log export ban was announced in October 2012 but imposed in April 2014. Its purpose was to increase domestic processors’ access to raw material. A ban was also imposed on other timber exports except through the port of Yangon, to increase the efficiency of enforcement by preventing cross-border trade. A one-year moratorium on logging across the country and a ban on non-competitive sales of timber have also been imposed since 2016, restricting exports of logs.

In Lao PDR, policy instruments aimed at curbing unsustainable and illegal practices in natural forests have existed for some time. These instruments were intended to reduce deforestation and redirect the export of unprocessed wood products to support the development of the domestic wood processing industry; however, they generally had little effect. In 2016, the government issued Prime Minister Order 15 (PMO 15) which prohibited the export of unprocessed timber from natural forests and restricted domestic trade in wood products, including from plantations.

Optimistically, with these policy instruments in place, there may now be the resolve to increase sustainable timber trade across the LMR.  In Lao PDR for instance, media reports on illegal logging related events have not ceased, but have reduced in the past five years or so.  Political turmoil in Myanmar combined with the COVID pandemic suggest the need for continued vigilance.

 

 

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Trend Two: The emergence of Viet Nam and Thailand as global hubs of wood products trade

Viet Nam’s exports have surged over the last four years, with veneer predominantly shipped to China and tropical plywood and wooden furniture mainly to the United States (Figure 3). In 2020, with the country’s early control of Covid-19 enabling a quick resumption of production and exports, Viet Nam was able to capture a surge in demand in the United States.

Exports are manufactured from a combination of domestic and imported fibre. Viet Nam’s imports of primary products from Lao PDR, Myanmar and Cambodia have declined considerably and have been replaced by supplies from the African region. There is on the other hand, an increasing trend of forest trade in plantation timber and fibre including from LMR sourcing countries.

In Thailand, no legal timber harvests in natural forests have been allowed since 1989. The focus on domestic harvest has shifted to plantations. Thailand now has a strong export industry based on sawnwood produced from rubberwood plantations. These plantations cover more than 3.7 million ha, with 90% of production being exported to China, mainly as sawnwood (Figure 4) and to a lesser extent, wooden furniture. Thailand is also a major exporter of wood-based panels, particularly MDF and particleboard which are based on plantation grown wood, including rubberwood. In 2020, the rubberwood industry was severely impacted by Covid-19 restrictions in the furniture manufacturing industry in China.

 

This article is part of the 8-part story series reflecting the latest developments and thinking behind the SFT-LMR initiative.

CHECK OUT MORE STORIES IN THIS 8-PART MINI SERIES

This article is part of the 8-part story series reflecting the latest developments and thinking behind the SFT-LMR initiative.