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Wood pellets – Vietnam’s emerging “gold mine” 2021

Posted on by vietimex.vn_admin

Wood pellets are an emerging product of Vietnam’s export wood processing industry. The production and export of this item has expanded very rapidly in the past 5 years. Up to now, Vietnam has become the second largest tablet exporter in the world (after the United States). Japan and Korea are the two largest markets for Vietnam’s tablets

I. Export scale of Vietnam wood pellets in 2021

 

Export volume of Vietnam wood pellets

Figure 1: Vietnam’s pellet export volume and value, 2013 – 2021

Vietnam’s wood pellet exports are on the rise (Figure 1). In 2021, the export volume will reach 3.5 million tons, equivalent to a turnover of USD 413 million. Exports of pellets increased the most since 2018. Export volume and turnover in this year nearly doubled compared to 2017. After 2018, exports continued to expand, with an increase in volume and turnover. about 10-20% per year. Tablet exports increased sharply in the first months of 2022 (data from the General Department of Vietnam Customs)

II. Vietnam wood pellet export market

Korea and Japan are the two most important wood pellet import markets of Vietnam. Import volume to these two markets accounts for 95% of the total pellets exported by Vietnam. Vietnam’s export volume and value to Japan and South Korea and other markets from 2017 to 2021.

wood pellets

Figure 2: Vietnam’s export volume and turnover to Japan, South Korea and other markets from 2017 to 2021

Up to now, the export scale of wood pellets to Japan and Korea is almost the same. Specifically, in 2021, Vietnam’s pellets exported to Japan and Korea will account for 43.8% and 56% of the total volume, respectively.
However, the Japanese market has a stronger and more stable growth rate than the Korean market. According to some businesses in the industry, in the future, the demand for tablets in the Japanese market will increase about 3 times compared to the present. Vietnam’s wood pellets have great market expansion opportunities.

III. Changes in the export market of Vietnam wood pellets in recent times

The tablet industry has also experienced fluctuations in the past 2 years. The COVID pandemic and the recent conflict between Russia and Ukraine.

  • Demand for tablets continues to expand, export prices increase rapidly
Information from export businesses said that the demand for wood pellets in Vietnam’s key export markets such as Korea and Japan will continue to increase sharply in the future.
Specifically, in Japan, the demand for this item by 2025 may increase by 2 times compared to today. Many Japanese traders have signed long-term contracts (10 years) with Vietnamese suppliers. The supply price is stable or only increases from about 3-5% per year. These long-term contracts help businesses stabilize production and business in the long term.
Unlike Japan, Korea is a more volatile market. Contracts Vietnamese businesses sign with Korean buyers are usually short-term, from 3 to 12 months depending on each contract. Prices also have short-term stability
However, with these contracts, businesses also have the advantage of being able to adjust prices to match market price fluctuations. Currently, the demand for tablets is increasing very strongly and this pushes up the price of export pellets.

 

Viên nén gỗ

 

IV: The reason why the demand for wood pellets in Vietnam increased sharply

  • Global supply of tablets decreased due to the Russia-Ukraine conflict

Russia is one of the major suppliers of tablets to the world, with a supply of over 2 million tons per year (Table 1), mainly for EU countries.
On March 8, the Russian Government issued a ban on the export of a number of wood products from Russia, including pellets (and logs). This ban is considered as one of the retaliation measures against sanctions from western countries. Currently applied to Russia in the context of the Russia-Ukraine conflict. This ban will be in place until December 31, 2022.
With this ban, tablets exported from Russia are considered illegal. With the effect of this ban, the supply of 2.4 million tons of tablets exported from Russia was completely lost. This requires countries importing tablets from Russia, mainly the EU, to find alternative sources of supply. Alternative sources include the United States and Canada. Some Vietnamese enterprises have also become alternative suppliers.
However, the United States and Canada are also important sources for Japan and South Korea. EU countries “suck” supply from the US and Canada, creating a supply shortage for Japan and Korea, thereby pushing up tablet prices recently. Currently, there is no sign that the price of Vietnam’s export pellets will slow down in the future.

dây chuyền sản xuất viên nén gỗ

Vietnam wood pellet production line

V: Supply of cheap wood pellets in Vietnam

Currently, the market for wood pellets in our country is experiencing great fluctuations with the number of factories producing wood pellets increasing, wood pellet products are also increasingly rich and diverse with many types such as wood pellets. sawdust, bagasse wood pellets, peanut shell wood pellets, acacia wood pellets, rice husk pellets…. Depending on the properties, the pellets made from these materials also have different quality, usually pellets made of sawdust or pure wood chips will have higher quality and therefore more expensive. Therefore, to get the best advice as well as receive attractive offers, customers can contact the phone number: +84 336274472 (Rachel Duong) or email: sales2.vinex@gmail.com

viên nén xuất Nhật

 Wood pellets made in Japan/Korea

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