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Vietnam’s exports of timber and wood products to the United Kingdom will be affected after the latter leaves the European Union in around two years following the recent Brexit vote, Vietnamplus reported on Thursday, citing industry experts.
The expected falling demand for housing construction in the U.K. will have a direct effect on Vietnam’s timber and wood product industry.
“Demand for imported wood products, including those from Vietnam, will surely decline in the future,” said To Xuan Phuc, an expert from the Washington-based non-profit organization Forest Trends, at a seminar in Hanoi.
Phuc, however, said Vietnamese exports will not be hurt in the next two years while the U.K. completes procedures to leave the E.U.
Tran Le Huy, general secretary of a wood association in Vietnam’s central province of Binh Dinh, agreed demand for imported timber and wooden products in the U.K. is likely to go down after the country leaves the E.U. He said wood processing companies in the province are worrying about that scenario.
Vietnam, Malaysia and Indonesia are the top three exporters of timber and wood products to the U.K. Vietnam’s timber and wood product exports to the U.K. rose to nearly $270 million in 2015, from around $181 million in 2012, according to a Vietnamese government statement on Thursday.
In the long run, Vietnam’s export value of timber and wood products to the U.K. is expected to fall by about $50 million a year.
“Brexit is forecast to make the export price of [Vietnamese] timber and wood products slide 5-7 percent compared to the current rate. This is a rather big drop that will cause considerable damage to companies,” Nguyen Ton Quyen, general secretary of the Vietnam Timber and Forest Products Association, said at the seminar. He said the current export price of timber and wood produts to the E.U. is between $1,200-$1,800 per container.
Experts also urged Vietnamese exporters to prepare for any future changes in tax, exchange rate, customs procedures or standards in the U.K.
Vietnam’s central government has asked three relevant ministries to evaluate the economic impacts of the U.K. leaving the E.U.
Policymakers and experts previously said Vietnam’s exports will face hurdles after the Brexit vote.
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