The summer solstice marks the middle of the year.
Speaking of the first half of the year, foreign trade exports were the most discussed topic in the textile industry. Many textile companies have experienced a decline in foreign trade orders. Some experts even said that foreign trade companies will face a painful period of 3-5 years. However, a textile company revealed to the editor two days ago that foreign trade orders are showing signs of picking up in June.
So why did this company undergo such a transformation?
Foreign trade orders improve, autumn and winter sectors develop
As early as early May, the textile company stated in a survey that foreign trade orders decreased by about 50% year-on-year, which directly led to changes in the company’s business structure.
Customs data showed that textile and clothing exports in May were 174.07 billion yuan, a year-on-year decrease of 10.8%, and a month-on-month decrease of 1.1%. Among them, textile exports were 82.64 billion yuan, a decrease of 11.9%, and a month-on-month decrease of 5.5%. Clothing exports were 91.43 billion yuan, a decrease of 9.8% month-on-month. An increase of 3.2%.
From this set of data, we can easily see that due to factors such as the shrinking global consumer market and weakening end demand, the textile and apparel industry, which is in a state of oversupply, is under pressure, and a decline in foreign trade seems to be expected.
So why did this textile company’s foreign trade orders turn around in just one month? “Our company’s fabric products have always maintained order quality, so the frequency of store inquiries is quite high. Recently, foreign trade orders have been picking up a bit, mainly because autumn and winter fabrics have begun to gain momentum.” said the salesperson.
From this point of view, demand has only weakened but has not disappeared. As the saying goes, “When the West is not bright, the East is bright.” It is not that all export markets are not optimistic enough. Export orders from ASEAN, the European Union and other places still maintain a growth trend.
The survey results also show that although the shortage of foreign trade orders has become a certainty, there are still some foreign trade companies in the textile market whose order volume has not decreased but increased. These companies either have high value-added products, sufficient customer reserves, or are in the market. Overseas markets are blooming more.
The total amount has not changed, but the size and profit have changed.
If the fabric market wants to improve, it needs favorable support from the apparel market. Comparing export data, the apparel sector is also better than the textile sector.
During the research, a buyer happened to be looking at the sample inquiry form in the store. During the chat, the buyer lamented that judging from the situation in the first half of the year, the total order volume was almost the same as the same period last year, but there were significant changes in the volume of orders. Generally speaking, the styles of clothing orders have increased, but the order quantity has become smaller.
This buyer has two garment factories, located in Shandong and Bangladesh. All the fabrics purchased this time will be sent to the production lines of the Bangladesh garment factories. He said, “Industrial transfer and production capacity relocation are the general trend. Choosing to build a factory in Bangladesh is not only to reduce labor costs and production power costs, but also to enjoy preferential tariffs and policy conveniences for exports.”
Provisional data from the Bangladesh Export Promotion Bureau show that Bangladesh’s ready-made garments (RMG) exports increased by 9.09% to US$38.577 billion in the first ten months of the 2022/23 fiscal year (July 2022-April 2023), while the same period in 2022 The export volume was US$35.362 billion.
In an increasingly transparent market environment, it has become increasingly difficult for textile and apparel companies to survive. The most profound thing is the shrinking profit margins. The advent of the information age has pierced the window of cost, coupled with the industry involution caused by overcapacity, the era when even polyester taffeta can be sold for 2-3 yuan is long gone.
“Actually, there are orders, but the profits are really not as good as before!” As this textile company said, the difficulties in the textile industry this year are not all caused by the decrease in orders. The reason why companies are “no longer making money” is The real reason for the complaint.
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