Data released by the China Foreign Exchange Trading Center on May 31 showed that the central parity rate of the RMB against the US dollar was reported at 6.3682 that day, the highest level since May 18, 2018. new highs. On that day, the spot exchange rate of onshore RMB and offshore RMB hovered around 6.36, rising from 6.56 at the end of March to the current level. If you look at it over a long period of time, the RMB/USD pair has started a round of appreciation since the end of May last year: from 7.16 at that time to the current 6.36, with a one-year appreciation rate of up to 11%.
This time of engaging in textile foreign trade is really real. Many people have felt the loss of payment caused by the appreciation of the RMB, especially our textile foreign trade. Because there is a huge time difference between the quotation of our fabric products and the return of payment, it often takes 3-4 months for quotation, production, and delivery. It usually takes 2-4 months for customers to pay off the goods after receiving the goods.
It is obviously impossible for the exchange rate at the time of quotation and the payment exchange rate to remain unchanged for half a year, especially as the RMB has been on an appreciation trend in the past two years. . At any time, the quotation will feel low after a few months. The appreciation of the RMB is the extent of the company’s losses. Of course, while our textile companies are bearing the losses caused by exchange rate changes, they also have to guard against possible payment arrears from customers.
The sample fee is not paid, the payment is Delayed deduction
Foreign trade customers have always been the favorites in the eyes of textile people. The most important point is that compared with some domestic customers, Foreign trade customers often pay for goods promptly, and delays and deductions are rare.
According to the person in charge of a textile company, they mainly made domestic orders before 2015, and encountered payment deductions and delays in the normal process of doing business. Even non-payment is common. As of now, domestic customers still have about 4 million in payment, which is basically not coming back. After 2015, the company turned to foreign trade, and its customers are mainly less developed countries such as Vietnam, Bangladesh, and India. Although these countries are relatively backward and poor, there are almost no cases of arbitrary deductions or non-payment of goods, unless there is a problem with the order. .
Foreign trade customers have always had a good impression on textile people. Because of this, at every foreign exhibition, there are always domestic companies competing for foreign customers. However, good payment methods for foreign trade customers have undergone some changes due to the impact of the epidemic last year.
According to the person in charge of a foreign trade company in Jiangsu and Zhejiang regions, he basically gave up orders from Indian customers this year because the order price was too low and the profit per meter of cloth It was only about 1 yuan, and the payment was still in arrears. The sample fabric fee invoice was given to me in April this year, but they refused to pay it. Forget about tens of thousands of sample fabric fees, and don’t let go of the payment for large products. Moreover, the volume of foreign trade orders is relatively large, which takes up a lot of funds. Failure to pay will cause great losses. In the end, the payment can only be settled after promising to accept partial deductions. These foreign trade risks are too great.
An important reason why foreign trade companies also have payment problems is that the epidemic last year had a huge impact on downstream clothing companies, and many clothing brands have even closed down, resulting in the The traders who placed the orders were unable to settle the payment and naturally lacked funds to pay upstream fabric companies.
Deposit production, delivery with payment Popular
Under the epidemic, there are not many orders to begin with, but if there are payment problems with the only remaining orders, it will be a blow to textile companies It’s quite huge. For this reason, some textile foreign trade companies have begun to change their previous payment methods in an effort to reduce possible financial risks.
“We make outdoor fabrics and only do foreign trade. In normal years, we can achieve a trade volume of 20 million yuan a year, but last year the trade volume was cut off due to the epidemic. Half of it is only 10 million. In addition, the exchange rate has also hit us hard. Many of our orders were quoted at an exchange rate of 7 and received at 6.5. Considering the tense epidemic situation in Europe and the United States, future payment and exchange rate risks are too great. We have decided to require all customers to place a 30% deposit before production, and the final 70% will be paid to pick up the goods. This can perfectly avoid the risk of exchange rate and payment arrears. If the customer does not accept it, we would rather not accept the order than lose the principal. Go in.” said a textile foreign trader.
Some foreign trade customers are breaking the good impression they left in the past, and domestic fabric suppliers will naturally have to change their past trade methods, especially payment methods. Of course, not only foreign trade, customers are also quietly changing.
A few days ago, some textile companies have made it clear that they will fully implement delivery with payment, which will break the previous ” The “sales on credit” model is of great significance. Loan delivery will greatly reduce the supplier’s financial risk, reduce operating costs, and the supplier’s profit margin will increase, and most of them are willing to make profits to downstream customers. At present, in the weaving market, loan delivery and credit sales They still coexist, but the prices given by weaving factories for the two payment methods are often lower in cash than in credit sales. Even if the cash customers are new customers and the credit sales are old customers, after all, the safety of the payment is above all else.
The long-term appreciation of the RMB is not good news for textile foreign traders. Especially under the trend of appreciation, if customers delay payment, the losses will expand infinitely. Deposit production and loan delivery will be perfectly avoided. These problems are just that the current textile market has not yet been able to move away from the credit sales model, but the epidemic in the past two years has clearly added signs of this change.
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