September has just entered, and two pieces of news have come out of the foreign trade market:
On September 1, the central parity rate of the RMB against the US dollar was reported at 6.8282, and the onshore RMB against the US dollar exchange rate Hitting a new high since July last year, the offshore RMB exchange rate against the U.S. dollar hit a new high since May last year. At the end of May, the RMB exchange rate against the U.S. dollar reached a maximum of around 7.17.
Starting from September 1st, the United States will resume restrictions on some products on the exclusion list Add 7.5% tariff!
Regarding these successive incidents, the textile boss said: He has lost his temper. Got it!
Many textile bosses are already bearish on the current round of tariff increases. Although the continued trade tension between China and the United States has become a major negative factor for the recovery of the foreign trade market this year, after more than two years of trade friction, many textile bosses have changed their layout and expanded the market share of other countries.
“At present, Japan and the United Kingdom have recovered relatively well among our foreign trade orders, but orders from the United States are still average. However, in the second half of August, overall foreign trade orders have improved. Improved.” said a foreign trade source.
During the visit, many textile bosses responded more to the appreciation of the RMB than to the current round of additional tariffs.
As far as the RMB exchange rate is concerned, the RMB has been at an overall The operation of appreciation continues, and according to experts, in the past five years, the depreciation process of the RMB has ended. The RMB has not only fallen completely, but has already fallen too much. In the future, the RMB will enter a long process of appreciation. But in just two months, the exchange rate of RMB against the U.S. dollar went from 7.17 to 6.82, which undoubtedly diluted the profit margins of textile owners.
“Due to the impact of the epidemic in the first half of the year, our order losses were relatively large. Now the foreign trade market is finally recovering, but as soon as the RMB appreciates, our profits will decrease.” Mr. Shen, a textile boss, said.
Some netizens also commented in the circle:
Jason Kettle:
Poor foreign trade people, We have just got rid of the impact of the epidemic, but we cannot escape the torture of the exchange rate. This sharp appreciation in the short term will only make things worse for the foreign trade industry.
Gaoshanliushui:
Many export companies have received orders until the end of the year or even next year, and prices have been locked. Now that this is happening, alas, there is no free lunch in the world, and the life of export companies is really hard! Either there is no order or the exchange rate is poor.
Jason:
Today is really miserable. The orders signed are calculated according to 7, and the value will increase significantly in the short term. What? Damn, export companies really suffer!
According to research, for every 1% appreciation of the RMB, the sales profit margin of the textile industry drops by 2%-6%. If the RMB appreciates by 5%-10%, industry profit margins will drop by 10%-60%. In particular, the garment industry, which is highly dependent on exports, suffered greater losses. And after the RMB continues to appreciate, the prices of Chinese goods in overseas markets will naturally increase, which will greatly affect the exports of China’s textile industry, thereby affecting its competitiveness in the market.
For textile bosses, the exchange rate rises and falls. Within expectations, they usually make slight adjustments based on the exchange rate of the day when quoting, leaving themselves some room for escape. However, due to the impact of the epidemic this year, many textile foreign trade bosses still say that orders have not recovered well, even if There are orders, and customers have lowered prices more frequently this year than in previous years, resulting in profits that are not as good as the same period in previous years. If the RMB continues to appreciate, it will not be a good thing for the company’s subsequent quotations.
“In previous years, many customers were fairly price-sensitive. If the product was good, we could place an order if our quotation was above US$3/meter, but this is not the case this year. If I If the quotation is high, then he may give the order to others. So this year, I have to control costs on the one hand, and on the other hand, I have to lower my own profits and control the product at 2-3 US dollars/meter, so that the customer’s order So it won’t be lost,” said Mr. Liu, who has been engaged in foreign trade of women’s clothing fabrics for more than ten years.
Nowadays, the foreign trade market is in a slow recovery stage, and many orders are still being placed. As a textile boss who makes gall cloth said, recently, 1-2 containers of foreign trade orders can be shipped every day. It can be seen that as long as the product is right, market demand will still exist. However, most textile people are not blindly optimistic about the next market. On the one hand, overseas epidemic data are still rising, and many countries have adopted another blockade policy:
Ukraine PreventionThe epidemic blockade is planned to be extended to November 1;
The Canadian government extends the ban on entry of foreigners by 30 days to September 30;
Malaysia extends the recovery movement control order until the end of the year;
Manila, Philippines Partial blockade measures have been extended to September 30;
Johns Hopkins University in the United States said that as of 12:08 on September 1, Beijing time , there are more than 25.4 million confirmed cases of COVID-19 worldwide, and the United States is the country with the largest number of confirmed cases and deaths, with more than 6 million confirmed cases.
On the other hand, after this year’s epidemic, many overseas end customers have been severely weakened, and the market “cake” has undoubtedly become smaller. Therefore, the phenomenon of grabbing orders and price-fighting has continued. The market is easy to emerge, and textile owners need to carefully adjust their quotations to prevent profits from being diluted during foreign exchange settlement due to exchange rate changes.
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