Vietnam's export turnover of wood products in the first seven months this year went down 17.6 percent year-on-year to 1.32 billion U.S. dollars, according to the General Statistics Office of Vietnam on Thursday.

The shrinking demand from Vietnam's key export markets like the United States, Japan and European Union's countries drove the country's wood processing industry into difficulty, according to Nguyen Ton Quyen, vice chairman of the Vietnam's Timber and Forest Product Association (VIFORES).

The association forecasted that these key markets would continue slashing their demand by 30 to 35 percent in the coming time.

To tackle difficulties for local wood processors, the association proposed the government to reduce 30 percent of the corporate income tax for all local wood processors.

The association also asked the Vietnam's Ministry of Finance to consider cutting import tax on wood input materials to help local wood processors and exporters reduce costs.

In 2008, Vietnam earned 2.8 billion U.S. dollars from wood export, lower than the target of three billion U.S. dollars, said the association.