In the first half of 2024, Vietnamese wood pellets exported USD 345 million. This value accounted for 4.7% of the total export turnover of the wood industry. To sustainably develop the pellet production sector, Vietnam needs to expand its consumption market. The most potential market is Europe, which has the significant demand for wood pellets from Vietnam.
Vietnam Timber and Forest Products Association has recently organized the seminar that related to wood pellets. The seminar named “Current situation and solutions for some pressing issues in the Vietnamese wood industry”. Sharing at the seminar, Dr. Phuc, an expert from Forest Trends, stated that the total volume of pellets exported by Vietnam in the first six months of 2024 was 2.6 million metric tons. The value reached more than USD 340 million, an increase of 4.6% compared to the same period last year.
The two largest export markets for Vietnamese wood pellets are South Korea and Japan. In the first six months of 2024, these two markets accounted for 92% of the volume and 90% of the value of Vietnam’s pellet exports.
The average export price of pellets has sharply decreased in both the South Korean and Japanese markets. For Japanese market, the average export price in the first half of 2023 was USD 170 per metric ton. However, in the first half of 2024, the average price has dropped to USD 146 per metric ton, a decrease of USD 24 metric tons.
Similarly, in the South Korean market, the average export price for the first six months of 2023 was USD 139 per metric ton. Nevertheless, in the first half of 2024, it has fallen to USD 104 per metric ton, a decrease of USD 35 per metric ton.
According to a supplier of Vietnam wood pellets, the EU market currently accounts for a small proportion of Vietnam’s pellet import markets. Specifically, it accounts for only 3.3% of the total export volume and 3.8% of total turnover.
In 2023, the EU market imported more than 155,000 tons of Vietnamese wood pellets. The export value was approximately USD 26 million, increasing by 3.7 times compared to 2022. This is a good sign of Vietnamese wood pellets for the EU market.
“These days, the Vietnamese government has committed to reduce emissions, as well as encouraged the businesses to do together. As a result, demand of wood pellets and chips for domestic consumption will increase,” Dr. Phuc noted.
According to the Vietnam Timber and Forest Products Association, Vietnam currently has 83 enterprises directly involved in exporting pellets and over 300 pellet production facilities. Compared to export demand, Vietnam has a relatively weak pellet production force, with export scale concentrated in only a few large companies.
In addition, the pellet production industry in Vietnam is facing fierce competition from the wood chip export industry for raw materials. Therefore, research on technology to expand raw material sources for the pellet production industry is very necessary.
According to Mr. Ha, the advantage of Vietnam’s pellet production industry is that there are many companies producing wooden products. If the by-products from wood processing discarded, it would be a waste. However, these are the best raw materials for pellet production. Utilizing sawdust and wood scraps for pellet production also helps reduce environmental pollution.
On the other hands, such companies do not have to burn them for disposal. Pellets produced in Vietnam are favored in the Japanese market because they burn without smoke, meaning no CO2 emissions.
However, the raw materials for pellet production are becoming increasingly scarce. Simultaneously, there is fierce competition for plantation timber with the wood processing and wood chip industries. For sustainable development, the Vietnamese pellet processing industry needs to change its technology and seek alternative raw material sources.
Vietnamese sources: vneconomy.vn