
1. Background
- Vietnam has now become the second largest producer of wood pellets in the world, after the United States. Most of the wood pellets produced in Vietnam are exported, with over 95% of the export volume going to South Korea and Japan as input materials for electricity production. A small amount is consumed domestically in Vietnam as fuel for boilers, dryers, etc.
- From 2013 to 2022, the volume and value of Vietnam’s wood pellet exports increased 28 and 34 times, respectively. According to the General Department of Customs, in 2022, Vietnam exported 4.9 million tons and the turnover reached 0.79 billion USD. In the first 5 months of 2023, the export volume reached 1.57 million tons, the turnover reached about 256.5 million USD. Exports are currently on the rise.
- Global wood pellet consumption will increase by about 250% in the next decade, reaching 36 million tons from 14 million tons in 2017. In recent years, demand has increased mainly in European countries, Japan and South Korea. However, the Vietnamese wood pellet industry has the opportunity to expand its market as demand in Vietnam has begun to show signs of rapid growth as the Government is making efforts to implement its commitments to reduce greenhouse gas emissions and use clean energy, including wood pellets to replace coal in energy production. The Power Plan VIII approved by the Government on May 15 prioritizes the development of renewable energy sources, including biomass power to replace coal power with high emissions. Therefore, the demand for wood pellets in the domestic market can expand very quickly in the future.
- This newsletter updates the recent export situation of Vietnam’s wood pellets, focusing on market changes in the first 5 months of 2023. Statistics on export volume and value were compiled by the Forest Trends Research Team and wood associations from the statistical data of the General Department of Vietnam Customs. Qualitative information on recent export market fluctuations and upcoming market trends were collected from discussions with leaders of the Pellet Association and information from other reliable sources. The comments in the newsletter are those of the authors.
2. Export wood pellet prices
- The Russia-Ukraine conflict has pushed the price of wood pellets in the world market to very high levels. Vietnam’s export wood pellet prices to South Korea and Japan in the first several months of 2022 fluctuated around 140 USD/ton (FOB Vietnam). The price then increased sharply, reaching 180-190 USD/ton in the last months of 2022 and early 2023.
- And then the price started to decrease sharply, especially in the Korean market. According to some export enterprises, the export price to this market in June 2023 was only about 110 USD/ton while the export price to Japan was 145-165 USD/ton.
3. Wood pellet exporting enterprises
- The number of wood pellet enterprises participating in the market is increasing. According to statistics from the General Department of Customs, the number of wood pellet exporting enterprises in Vietnam increased from 123 enterprises in 2020 to 152 enterprises in 2022.
- The number of enterprises participating in exports to Korea is much larger than the number of enterprises participating in exports to Japan. One of the main reasons for this situation is because accessing the Korean market is easier than the Japanese market.
Note: The information in this article is for reference only and may change depending on the manufacturer and source of raw materials. For the most accurate information, you should consult experts, wood pellet suppliers or contact Overc.vn to answer your questions and problems related to wood pellets and wood chips.
Source:
- Hawa
- Overc Team synthesise, analyse and write articles.
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OVERC was established in Vietnam, which has 17 FTA (Free Trade Agreement).
Vietnam is one of the countries with the most FTAs in the world.
Our main activities are manufacturing and distributing Wood Pellets and Wood Waste. Our wood pellet products, which are made from Acacia veneer residual 100% or wood waste (logs, sawdust, wood chips, wood shavings,…), have been exported to many countries around the world such as Japan, Korea, EU, etc.
OVERC Co.,Ltd would like to wish you all the best at this time.
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