September 2021 has entered. At present, the foreign trade situation is still uncertain, and most export textile companies are cautious about orders in the second half of the year. According to analysis, the positive factors facing my country’s textile and apparel exports mainly include further improvement in global economic growth expectations, and international market demand is expected to continue to pick up. At the same time, the risk factors we face still exist: the foreign epidemic has not yet been fully and effectively controlled, and local rebounds may have an impact on the recovery of the international market; international commodity prices fluctuate significantly, increasing the procurement risk of front-end products such as textile raw materials; international shipping prices The rise will also have a profound impact on transportation costs; in addition, factors such as trade frictions and exchange rate fluctuations will also have an impact on the outlook. Whether textile foreign trade companies can successfully resolve uncertain risks, stabilize orders, and gain a foothold in the market is a crucial issue at present.
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Can the return of orders continue
Currently, the European and American markets are gradually recovering, and consumer demand is growing day by day; affected by the epidemic, textile companies in Southeast Asian and South Asian countries have suspended production, and production capacity has been greatly restricted. As a result, a large number of European and American orders have returned In my country, the number of orders received by textile companies has increased significantly.
The person in charge of a company in Guangxi that is mainly engaged in the export business of knitted garments said: “In order to complete orders on time and with high quality, the workshop has started a high-speed operation mode of 24 hours of continuous operation.” He introduced , the company mainly processes and produces sweaters, and its products are exported to European and American markets. There were a lot of orders in the first half of this year. As of the end of July, 3.6 million pieces had been delivered, with a total value of more than 17 million US dollars. Production increased by 25% compared with the same period last year. Currently, the workshop can produce more than 10,000 products every day. Due to the surge in orders, some orders need to be processed outsourced.
“At present, we have received orders from India, mainly satin fabrics, with a total of 2 million meters, and the quantity is not bad.” said the person in charge of a Zhejiang company that produces stretch fabrics. arrive.
It is worth noting that “Although many of the orders received in the first half of the year were transfer orders from Southeast Asian textile and apparel companies, as the global epidemic situation stabilizes, these orders will still flow out. .” A staff member of a Jiangsu company responsible for developing coat processing business said that the order-taking situation in the second half of this year was not ideal. This was largely due to the recovery of textile industry production capacity in some Southeast Asian and South Asian countries, especially the decline in exports from India and Bangladesh. recovery.
“Last year’s situation was quite special. Our country was the first to organize the resumption of work and production after the outbreak. In many countries, the epidemic was still severe, and normal production could not be carried out. Overseas customers can’t wait any longer and can only go to China to place orders.” The staff member said that now that the epidemic abroad has eased and production capacity in Southeast Asian and South Asian countries has resumed, customers will follow suit.
He said: “Delivering orders on time, with high quality and quantity is the prerequisite for retaining more resources. In the future, the company will actively implement related matters to improve production capacity and production efficiency to meet orders. production needs.”
In addition, my country’s export textile companies also need to highlight the uniqueness and irreplaceability of products, focus on technological content, strengthen innovation, and enhance customer stickiness. Only in this way can we gain a firm foothold in the international market and secure orders.
Front-end procurement risks increase
Blessed by the recovery of the international market Under the circumstances, the prices of various upstream textile raw materials have rapidly increased due to global inflation.
It is understood that since late June this year, cotton prices have started a new round of upward trend, with a cumulative increase of more than 15% so far. Although polyester prices began to gradually fall, they rose again at the end of June and were once close to the highest price this year at the end of July. The market demand for spandex products has always been high, and prices show no signs of falling. In addition, the price of wool has also reached a new high in many years. Market demand in the second half of autumn and winter will drive wool prices to continue to rise.
Commodity prices have increased significantly this year, which is good for companies in the upstream of the industrial chain. If it can be transmitted to the terminal, it will not have much impact on midstream and downstream companies. However, the current situation is that the cost increase of front-end products has not been effectively transmitted to the export price of finished products. Therefore, most of the price increase costs are borne by the intermediate links in the industrial chain, and a considerable number of export textile companies are under pressure. The person in charge of a children’s clothing processing company in Shandong for the European and American markets said that the prices of cotton and cotton yarn increased sharply in June and July, and some export orders even subsidized the costs, so the enthusiasm for accepting orders, arranging orders, and delivering goods was not high.
“The price of raw materials in recent times has been the highest in two years. It doesn’t matter if you can’t receive orders, otherwise you will also lose money. After all, you make small profits from garment processing and export.” He said that companies have begun to selectively accept orders and produce. For example, some new products have higher profits and can withstand the current high costs, so they will be given priority; orders for regular products and old products, due to thin profits, may be waited until the price is suitable, otherwise they will be put on hold for the time being.
“Since July and August, the orders received have been mainly from developed countries in Europe and the United States, mainly for the Christmas and Easter peak season markets, with large quantities and thin profits. Many of them are for I only accepted it to ensure production, as long as the costCompany manager Meng Zhuo told China Business News that the garment factory’s production is indeed tight this year, and “the list cannot be completed.” However, some of the orders returned to China were produced by Chinese companies that could have been produced in factories in Southeast Asia, but due to the epidemic, they had to be produced at home. Domestic production costs are definitely higher than in Myanmar. Coupled with factors such as rising raw material prices, high international shipping costs, and exchange rate fluctuations, the increased costs of these products will inevitably further erode corporate profits.
According to data from the Shanghai Shipping Exchange on September 3, the Shanghai Export Container Freight Index rose to 4502.65 last week, a weekly increase of 2.67%. It has been a weekly increase for more than three consecutive months. Hit new highs every week.
Meng Zhuo pointed out that August is the last stage of the peak shipping period, and bulk orders for autumn and winter clothing will be shipped out as much as possible before the end of August. Due to tight shipping supply, the export transportation cycle this year is longer than in previous years. Therefore, orders for this autumn and winter must be completed by the end of July. Some were snatched up early, and the remaining ones that were not shipped were faced with the problem of being unable to order. The risk is that the goods will be backlogged in the warehouse because of the containers. “Once the season is over, no matter how good the customer is, they won’t want these goods.”
Meng Zhuo and the others received their orders for this autumn and winter in October last year. In his opinion, the status of the next orders is still unknown. For orders to be shipped next year, we must not only consider exchange lock-in, but also consider the increase in shipping charges, and work out how the increase will be shared in the contract.
On August 10, the person in charge of the Foreign Trade Department of the Ministry of Commerce said when introducing my country’s foreign trade operations from January to July 2021 that from January to July, my country’s foreign trade grew rapidly. China will stabilize and improve while maintaining stability, and effectively serve the construction of a new development pattern. However, the current global epidemic continues to evolve, risks in industrial and supply chains are increasing, trade issues are increasingly politicized, and there is great uncertainty in economic recovery. </p
