“Since foreign trade orders were canceled and suspended in mid-March, we have not received any orders yet. Our customers are located in East Asia, such as Malaysia, Japan and Australia.” A man who makes men’s and women’s clothing and home textiles Foreign traders of similar fabrics said helplessly.
Recently, as the epidemic is gradually brought under control, many countries in Europe, the United States, and Southeast Asia have lifted their lockdowns and begun to resume work and production. However, in the process of easing social isolation, some countries still face the potential risk of a rebound in the epidemic, and the recovery of foreign trade demand is not obvious. Today, except for protective clothing fabrics, there are still very few orders for other clothing categories on the market. Regarding the trend of the foreign trade market in the future, most textile people are pessimistic. Some cloth bosses said: “Foreign trade will not be good this year or even next year.”
Weaving mills and traders take the initiative to reduce prices and remove inventory
A foreign trade dealer in Wujiang said that due to the intensive cancellation and suspension of foreign trade orders starting in mid-March, a lot of inventory accumulated in the warehouse. “Now that the epidemic situation has improved, I thought about asking customers if they wanted it and offered to give up the price, but almost no one wanted it. We originally had no inventory in the trade, but now we have 300,000 meters of cloth in the warehouse.”
Coincidentally, a trader specializing in imitation silk said: “Recent orders for imitation silk have been okay, but because the inventory in the entire market is now very high, we have to reduce the price by 1-2 cents in order to win the order.”
The lack of terminal orders has caused the entire industry chain to face high inventory. From the raw material end to the terminal clothing companies, a large amount of inventory has been accumulated. At this time, although crude oil continues to rise and the polyester yarn market has also recovered, this wave of price increases in raw materials has no effect at all on companies that have no business to sell. “We don’t care whether the raw materials are rising or falling now. Our orders have not been affected. How can we have the confidence to raise prices? At this time in previous years, we were so busy working overtime every day. Now we can only sit in the sales department and drink tea.”
Theepidemichascausedsomuchdamagethataforeigntradecompanyshutdownallperipherallooms
Afactorywithmorethan1,000loomsThetrade-integratedenterprisesaid:”Wecannolongerholdon.Allthemorethan300loomsinourAnhuibranchhavestopped,andhalfofthelocalmachinesinShengzeareresting.80%ofourbusinessisforeigntrade,andforeigntradehasbeencoldthisyear.Wewereplanningtoswitcheverythingtodomesticsales,buttheeffectwasnotverysatisfactory,andthedomesticmarketwasnoteasytosell.Therewasalreadyashortageofpeople,sowecouldonlygetordersbykeepingthepriceverylow.Inthiscase,wechosetosellalltheAnhuibranches.Stop,savemoney,waituntilworkersareneededandthenrecruitthem,Ibelieveitwillnotbeverydifficult.”
The editor did some calculations, taking 300 looms as an example The rent in Anhui is about 60-70 yuan/year/square meter. More than 300 looms require about 6,000 square meters of factory buildings. The rent is 360,000-420,000 yuan/year. In terms of wages, skilled workers are 6,000-7,000 yuan/year. A new employee costs about 4,000 yuan per month, and generally requires about 50 people. Then the monthly labor expenditure is more than 300,000 yuan. Plus other expenses such as raw materials, water and electricity, the monthly expenditure is at least 1 million yuan.
For many cloth owners, instead of weaving cloth to take up space, To occupy working capital, it is better to stop production, which only wastes rent and machine depreciation expenses. Moreover, when factories are generally built in other places, whether they are transferred there or expanded due to the need for their own development, the number of machines will increase by hundreds or thousands. You can imagine how much working capital the knitted inventory will take up if there are no orders! The higher the inventory, the more funds will be occupied. When the future prospects are uncertain, suspending and reducing production is a good way to recuperate.
Afterword
Although the domestic trade market has recovered recently, and some traders have received orders of hundreds of thousands of meters, the foreign trade has not It is still “calm”. Although some countries have gradually lifted the lockdown, the lifting of lockdown does not mean the return of orders. Under the epidemic, the economic situation of various countries is not optimistic, the number of unemployed people continues to rise, and retaliatory consumption is difficult to appear. Moreover, the foreign epidemic has not yet been completely controlled, and the number of confirmed cases in some countries that have lifted the lockdown is still increasing, raising the possibility of a “secondary outbreak.” As time goes by, by the end of August, it is expected that a wave of foreign trade orders will be issued one after another, but the order volume will definitely be incomparable to previous years. It will take a long time for foreign trade orders to return to the level of previous years. </p
