Wood Chip Trade
International trade in wood chips is driven by demand from the pulp and paper sector, particularly in China and Japan. Consequently, the Asia-Pacific region has become a global hub for wood chip production and trade, with additional supplies coming from Brazil, South Africa, the USA, and Chile.
Vietnam has become the largest supplier of hardwood wood chips with 14.4 million oven dry tons (ODT) in 2023 - a 9% decline from the record high in 2022. Around 65% of the wood chip export from Vietnam supplies the Chinese market.
The rapid growth of the pulp and paper sector in China over the last two decades, along with Vietnam's geographical proximity, has been a significant factor in Vietnam's dominance in the wood chip export market. Australia follows as the second largest exporter of hardwood chips, with 4.6 million ODT in 2023.
Wood Chip Trade
Vietnam has more than tripled its production and export of wood chips since 2010, significantly impacting the global wood chip export market. Over the same period, other major exporters of hardwood chips have remained relatively stable, with a decline in Chilean exports and an increase in exports from Thailand.
A pro-active government policy for acacia plantation establishment on deforested and degraded former natural forest land has led to the establishment of around 2.2 million ha of acacia plantation in Vietnam. Much of this area is located in coastal provinces with access to ports. The warm and wet climate, fertile soils, absence of major pests and diseases, and the availability of a low-cost rural workforce have all contributed to the increase in the production of acacia wood chips at a lower cost than other established suppliers.