Export of paper and paper products in the first 6 months of 2019 and opportunities

According to statistics from TCHQ, Vietnam's export turnover of paper and paper products in June 2019 was gloomy, down 5.6% compared to May 2019. Generally, from the beginning of the year to the end of June 2019, the export turnover of this group of goods only reached 506.04 million USD, down 0.2% over the same period in 2018.

 

Vietnam exports paper and products mainly to Southeast Asian countries, the proportion of exports to this market accounts for 30.1%, to EU countries only accounts for 1.14%.

 

In the top 10 main export markets for paper and paper products, the US is the largest market accounting for 19.87%, reaching 100.59 million USD, up 56.18% over the same period last year. In June 2019 alone, 15.94 million USD of paper and products were exported to this market, down 40.51% compared to May 2019, but up 88.08% compared to June 2018.

With a location and geographical distance not far from Vietnam, mainland China is only second after the US, reaching 78.68 million USD, but compared to the same period, the export rate to this market decreased by 39.71%. In June 2019 alone, exports to mainland China were also 8.89 million USD, down 57.38% compared to May 2019 and down 78.6% compared to June 2018.

 

Next are the markets of Taiwan (China) and Cambodia with a turnover of 49.02 million USD, respectively; 45.16 million USD, up 8.58% and 46.35% respectively over the same period last year.

In general, in the first 6 months of this year, exports of paper and products to all markets had a growth rate, this number accounted for 52.94%, especially exports to the UK and Germany markets increased sharply, accordingly, exports to the UK increased more than 3.7 times (equivalent to 272.78%) although only reaching 2.32 million USD, particularly in June 2019, export turnover to the UK decreased by 24% compared to May 2019 but increased 2.7 times (equivalent to 168.79%) compared to June 2018 with a value of 548.1 thousand USD; exports to Germany increased 3.1 times (equivalent to 210.04%) to 2.03 million USD, in June 2019 also exported to Germany 420.9 thousand USD, down 16.3% compared to May 2019 but up 2.7 times (equivalent to 172.21%) compared to June 2018.

 

In the opposite direction, the Philippines sharply decreased imports of paper and paper products from Vietnam, down 52.93% equivalent to 7.13 million USD, in June 2019 alone, the Philippines increased imports from Vietnam by 20.44% compared to May 2019 reaching 1.48 million USD, but down 8.43% compared to June 2018.

 

 

The relaxation of the new policy on RCP imports by the Indonesian government and the implementation plan from June 1, 2019 is favorable information for Vietnamese paper enterprises when exporting to this market. when Indonesia was the 6th largest market in terms of Vietnam's paper and paper products export needles in the first half of 2019, accounting for 6.1% of the proportion.

 

Previously, the Indonesian government stipulated that it would carry out pre-delivery inspections, open at least two bales for each container to check the condition of RCPs, ensuring that imported RCPs must be clean, dry and uniform. That regulation immediately caused an impact on manufacturers who had to import RCP, domestic demand fell, suppliers stopped selling RCP to Indonesia.

 

But it appears that the Indonesian government has pushed back on imposing the previously proposed 0.5% pollutant limit for imported RCPs. Instead, the government said it aims to adopt the standards of ISRI (Institute of Scraping Recycling Industries) in 2018 – Guidelines for Paper Stock: PS-2018. In which, the US PS-2018 allows for a contaminant limit higher than 0.5% in most cases (1-2% for prohibited substances and 3-4% for other permissible impurities (Outthrows)). The Indonesian government has also clearly explained the term "homogenous" as a reference for these standards, according to the Vietnam Paper Association FastMarkets RISI/6.2019

Not only the Indonesian market, but Vietnam's paper exports to the Chinese market also have many opportunities, when the Chinese Government issued the 8th batch of recalled paper import licenses (RCP) for 2019, with a quantity of 5,940 tons.

 

This time, the Chinese government gave only two small companies. Similar to Thursday-to-Saturday licensing sessions, import volumes for new licensing fell by about 37.5% compared to the quota expected at the beginning of 2019. Laizhou Rutong Specialty Paper was granted 5,250 tons, Guangdong Tonli Customization was licensed to import 690 tons. The total volume of licenses issued after eight batches in 2019 was 8,238,995 tons, compared to the same period in 2018, the Chinese Government issued a total of 13 batches of licenses with a total volume of 10,844,135 tons. In 2018, China licensed the import of a total of 18.2 million tons of RCP. It is forecasted that China's total RCP import quota in 2019 will decrease to 11-12 million tons, Vietnam Paper Association, Fastmarkets RISI.