As the saying goes: “Three points are destined, seven points depend on hard work.” But there is also such a law in the textile industry: “Three points domestic trade, seven points foreign trade.” The market situation of foreign trade determines the trend of the entire market, but recently It seems that life for foreign trade workers is not that easy.
European and American orders generally have lower prices
Recently, a friend of the editor who specializes in foreign trade orders from Europe and the United States complained: “European and American customers have completely lowered prices. Cloth that originally earned 7 yuan per meter was reduced by about 2 yuan.” Nowadays, foreigners are becoming more and more good at calculating prices. No matter how China’s textile production capacity is relocated or reorganized, the final result will be an increase in production capacity. The resulting overall overcapacity directly leads to foreign traders taking a dominant position in price negotiations.
In addition, weaving companies have accumulated a lot of inventory during the three-year epidemic. According to the data monitoring of Silk City, the current inventory of gray fabrics in Jiangsu and Zhejiang is about 34 days, which is down from the end of last year, but overall it is still at a high level. Under the pressure of high inventory, the price war in the textile industry is no longer just at the domestic trade level. The smell of gunpowder in foreign trade is also getting stronger and stronger. Textile companies have listed clearing inventory and revitalizing funds as their top priority.
RMB appreciation expected
Recently, some senior financial practitioners issued a document saying that they believe that expectations for RMB appreciation have formed in the Chinese market. There are three reasons for the rapid rise of the RMB: first, my country has optimized epidemic prevention policies and enhanced economic vitality; second, international capital flows have turned, and emerging markets have become popular; third, the market has formed expectations for RMB appreciation. And as China’s economy continues to develop steadily and steadily, the RMB exchange rate may continue to rise in the future.
Although in the long term, the appreciation of the RMB is due to optimism about China’s economy and is considered a positive situation, in the short term, it does pose greater challenges to textile foreign trade companies. Because the impact of currency is that there is less money when settling foreign exchange. Based on what was said above, foreigners are now starting to lower prices across the board, and the fluctuation of the RMB exchange rate is simply adding insult to injury for foreign traders.
While profits are being continuously compressed, the current overall form of foreign trade is not optimistic either.
The market is occupied
In recent years, the European and American markets have suppressed the Chinese market due to various political and geopolitical factors. Many foreign traders have gone to Southeast Asia to find alternative companies for cooperation. This is why after the epidemic policy was optimized, , many provinces have seen the phenomenon of chartering flights abroad to grab orders. What are they grabbing for? Of course, the most superficial thing is definitely to grab customers, and to grab stable customers.
But what really matters is time. If we do not seize the market opportunities in those few months after the optimization of prevention and control, then the situation will become that after Europe gradually recovers from the Russia-Ukraine conflict, it can now Seeing that the sky-high energy prices at that time have been alleviated, the production order in European and American societies will gradually recover, some customers may be permanently lost, and domestic substitutability will become stronger. So what we are seizing is a critical time point, and what we are seizing is an opportunity.
Currently, foreign traders are facing multiple pressures. Due to the disconnected years, it is impossible to recover in just a few months. Therefore, the “gold, three, silver, and four” of foreign traders may not meet the expected demand, but no Unexpectedly, there will be a new atmosphere in the second half of the year!
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