Nguyen Huy Cuong, manager of a Dong Nai-based sawmill, said many Chinese traders and their Vietnamese representatives buy up all kinds of wood at up to 10 percent higher prices than local buyers.

Some of them opt for planed wood to enjoy the lower export duty of 5 percent. Timber attracts a 10 percent duty.

Last year too Chinese buyers bought raw wood to take back to China, sending rubber wood prices up by 20 percent.

Trinh Kim Thanh, director of Dong Nai-based furniture maker Kien Phuc Company, said wood prices have gone up several times this year.

“It is risky to sign new contracts since wood costs continue to rise,” she said worriedly.
A wood processor said timber prices had shot up in China, making Vietnam a good source for the Chinese wood processing industry.

According to the customs department, wood exports to China surged 63 percent year-on-year to US$344 million as of the end of July.

With this, China became for the first time Vietnam’s second largest timber importer after the US, which bought wood worth $745 million in the same period.

Nguyen Ton Quyen, deputy chairman of the Vietnam Timber and Forest Produce Association, said the rising export to China is not exactly good news.

“The question is what kind of wood they buy from us.”

He said it would be good if China imported wood products.

“But if they buy raw wood, we must be wary of a supply shortage for the domestic wood processing sector,” he explained.

Nguyen Chien Thang, chairman of the Handicraft and Wood Industry Association (HAWA), said only a few wood processing businesses have their forests to grow timber, with the others having to buy on the market.

Tran Quoc Manh, HAWA’s deputy chairman, was quoted by Sai Gon Tiep Thi newspaper as saying, “The rising raw-material costs will force local processors to hike their prices, thus lowering their competitiveness with Chinese businesses.”