Vietnam wood pellet industry set for expansion


In the first half of this year, Vietnam exported 1.85 million tonnes of wood pellets to overseas markets, earning nearly US$300mil (RM1.36bil), Viforest said in its latest report. — Viet Nam News

HANOI: South Korea and Japan have become the biggest importers of Vietnamese wood pellets, accounting for over 95% of Vietnam’s total export of the product, the Association of Vietnam Timber and Forest Product (Viforest) says.

In the first half of this year, Vietnam exported 1.85 million tonnes of wood pellets to overseas markets, earning nearly US$300mil (RM1.36bil), Viforest said in its latest report.

During the period, Vietnam exported 0.8 million tonnes of wood pellets to South Korea and is expected to ship one to 1.5 million tonnes to the market by the end of the year.

The wood pellets exported to South Korea are primarily made from by-products of the wood processing industry, such as sawdust, wood shavings and leftover wood scraps. The exporters are mostly in the southeastern region where wood furniture factories are concentrated.

Currently, Vietnam is South Korea’s largest supplier of wood pellets, accounting for 80% of the total demand of the market.

Meanwhile, Vietnam’s exports of wood pellets to Japan reached 0.87 million tonnes over the past six months. The orders received were mostly long-term contracts.

Japan requires pellets from domestically grown timber in forests with sustainable forest management certification.

This source of raw material is mainly available in areas with a high concentration of planted forests in Vietnam, particularly in the central and northern regions.

The price of Vietnam wood pellets exported to South Korea in June was around US$110 (RM499) per tonne, while that to Japan ranged from US$145 to US$165 (RM658 to RM749) per tonne.

Viforest forecast that in the last months of 2023, Vietnam’s wood pellet production and export would not see a remarkable change. The price of pellets exported to South Korea would increase according to the current momentum, but would still be lower than the price at the end of last year.

The volume and price of Vietnamese wood pellets exported to Japan would be stable, the association predicted.

An expert from Forest Trends, To Xuan Phuc, said the demand for pellets in Japan would increase to 20 million tonnes by 2030, of which the number of wood pellets would account for about 13 to 15 million tonnes. This would be a great opportunity for Vietnamese enterprises, especially those that had large-scale and well-managed factories.

Each year, Japan uses about eight million tonnes of pellets, of which 40% to 50% are palm kernel shells, and the rest are wood pellets.

Delivering a long-term market analysis, Phuc said that the world demand for pellets would increase by about 250% in the next decade, reaching 36 million tonnes from 14 million tonnes in 2017. — Viet Nam News/ANN

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vietnam , woodpellets , export , southkorea , japan , production

   

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