Since this year, foreign trade has been less than expected, which has troubled many textile companies. To some extent, the traditional peak season has also been affected by the lack of foreign trade orders.
According to market practice, in the second half of the year, in addition to coping with the domestic “Double Eleven”, textile companies will also usher in a wave of foreign trade orders during the Christmas season. During the visit and survey, an industry and trade enterprise also said that foreign trade orders have indeed picked up, mainly due to orders being placed during the Christmas season.
The data is improving and the foreign trade market is showing an improving trend.
To see the specific situation of foreign trade orders, you have to refer to the relevant official data.
Statistics from the General Administration of Customs show that in October, my country’s textile and apparel exports to the world were US$22.97 billion, a year-on-year decrease of 4.8% (a year-on-year decrease of 1.5% in RMB). Among them, textile exports were US$10.71 billion, a year-on-year decrease of 3.3% (a slight increase of 0.1% in RMB terms); clothing exports were US$12.26 billion, a year-on-year decrease of 6.0% (a year-on-year decrease of 2.9% in RMB terms), with the decline narrowing by 0.6% from the previous month. percentage points.
It can be seen from the data that the current world economic growth is slowing down, the global textile supply chain is in a stage of deep adjustment, and the overall textile foreign trade market is operating under pressure. However, as the year-on-year decline further narrows, positive changes are gradually taking shape. As the above-mentioned textile companies said, the placement of orders during the Christmas season has undoubtedly injected a bit of vitality into the foreign trade market.
Taking a certain textile company as an example, in the first half of the year, its foreign trade orders could barely last for about one month, with a shrinkage of nearly 50%. At that time, he lamented that from the order level, domestic sales had already outperformed foreign trade; but at the end of October, he was delighted to find that the current foreign trade orders could last until the end of the year, and there was an improvement trend.
Coincidentally, recently, another textile boss has also received foreign trade orders one after another. Due to the extremely tight delivery schedule, the factory is now rushing to produce. (Foreign trade orders are increasing, and trial orders will be added in September and October. Are you in a hurry to get goods but don’t have inventory? Textile bosses are working hard to rush orders!)
Shipping space is tight, price increases may squeeze profits again
After reading the export data, let’s take a look at another key indicator – shipping conditions.
It is reported that shipping companies have recently started a new round of price increase plans. Shipping companies such as Hapag-Lloyd, CMA, and Maersk have once again issued notices on fee collection adjustments for some routes.
Judging from the shipping index, the overall space on North American routes was tight last week, and market freight rates continued to rise. The freight index for the US East Route was 849.7 points, an increase of 8.3% from the previous week; the freight index for the US West Route was 1222.6 points, an increase of 10.7% from the previous week.
Here we capture two important information, tight shipping space and rising freight rates. Under normal circumstances, shipping space will only become tight when foreign trade orders are shipped in large quantities. When the shipping space is insufficient to meet the demand for shipments, it is natural for ocean freight prices to rise.
A foreign trade source revealed, “At the end of October, we need to pack the container for shipment. But the container is too difficult to order, and our customer is in a hurry. If we can’t deliver the goods on time at the end of October, he will ask us to switch to air freight. The price of air freight is really high.” It’s a bit overwhelming. ”
Faced with the market environment of internal volume and external pressure, textile companies generally operate with small profits. If the goods cannot be shipped smoothly by sea, they will be forced to switch to air freight, but the price of air freight is several times that of sea freight, which will directly make this order unprofitable, and other orders may be needed to make up for the loss of this order.
This year, textile companies that focus on foreign trade are really having a hard time. They finally recovered a little bit, but there were variables such as shortages of containers and rising freight prices, which diluted profits again.
Taken together, although foreign trade orders are picking up, the industry is still not optimistic about their sustainability. As the end of the year approaches, more textile companies still want to make a smooth transition, hoping that the market will get better next year.
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