With a lack of fuel imports from Russia, European countries increase imports of wood pellets from many countries. This is a good opportunities for Vietnam’s pellet enterprises to increase the market share in the world.
Since March 2022, the Russian Government has issued a ban on the export of certain wood products, including pellets and logs. This ban issuance is in retaliation for sanctions from European countries. With this ban, it is illegal to export wood pellets from Russia to Eurozone. Therefore, European countries have to find alternative sources.
Acacia wood pellets from Vietnam
According to Wood Resources International LLC, there are diverse usage needs of pellets in. Residential heating of wood pellets accounts for more than 40%. Power plants account for 36% and the remaining is used for heating commercial buildings. Demand for wood pellets is likely to increase by 40% over the next five years. Depending on how it develops, European demand for wood pellets could increase to ten million tons.
Previously, Vietnam focused on exporting wood pellets to South Korea and Japan. These two markets account for 99.8% of total export turnover. However, with high demand from Europe, the export price of wood pellets in Vietnam has skyrocketed two times.
Raw materials for wood pellet companies in Vietnam
Specifically, several Vietnam’s pellet enterprises have signed export orders to South Korea at a price of $150/ton. It increased about 19.4% compared to the end of 2021. Export prices to Japan fluctuated between $140 – $145/ton, an increase of about 10%.
Pellets are an emerging product of the Vietnamese wood processing and export industry thanks to the advantage of raw materials. With a simple process that does not require high technology, production facilities make use of all their “waste products”, such as sawdust, wood chips, wood chips. Even they use other waste products from other industries such as rice husks, straw, bagasse, tree trunks, seed shells…
Up to now, Vietnam has become the second largest exporter of pellets in the world, after the US. However, export output and value of Vietnam’s pellet enterprises have been continuously increasing. In 2021, export volume reached over 3.5 million tons, bringing in more than $400 million for the wood industry.
Vietnamese source: https://trungtamwto.vn/tin-tuc/21512-eu-khat-vien-nen-go-thay-the-khi-dot-co-hoi-bat-ngo-goi-ten-doanh-nghiep-viet