The increase is attributed to strong performance of large capacity paper mills in the fourth quarter of last year and early this year.

The sector imported 465,000 tons of paper in four months, up 5% against the same period last year for domestic production and consumption, and exports. Most of the imported paper was mainly used for high-end packaging and paper production for the domestic market. However, paper businesses face numerous difficulties brought about by price fluctuation and competition. World prices soared in the first quarter and has further inched up in April.

Since late last year domestic businesses have had to compete with Chinese rivals for buying paper materials and finished products as China intends to reduce paper production to protect the environment.

In the domestic market, paper mills begin to accelerate production to meet increasing demands of the new school year and other activities in the last months of the year.

According to the Vietnam Packaging Association, the domestic packaging industry has achieved high growth over the last 10 years. As a result, the demand for materials has also increased strongly.

Last year, Vietnam imported around US$2.5 billion worth of paper and paper products, US$600 million of which came from China.

Meanwhile, the purchase of materials and paper by Chinese businesses also pushed Vietnam’s paper exports up high. Vietnam’s paper exports skyrocketed 400% to 187,056 tons in the first four months of this year.