Recently, many textile foreign trade factories in my country have experienced a surge in orders. In fact, the sudden outbreak of the textile market seems to have “ignited” the entire foreign trade industry, and many practitioners are optimistic that orders will continue to pick up. However, in addition to the continuous prosperity of orders, textile and garment foreign trade companies still face many risks and problems. In addition, with the recent resurgence of overseas epidemics, the risks of foreign trade exports have increased, and we need to be cautious while being optimistic.
1
Since the second half of this year, despite the global epidemic, demand in overseas markets has remained high.
Since the beginning of October, the foreign trade orders of Shaoxing Keqiao Senru Textile Co., Ltd. have begun to surge, and customers have continued to place additional orders every day. The company mainly produces knitted fabrics, such as polar fleece, lambswool, flannel, sweatshirt fabric, etc.
Textile factories in India, Bangladesh and other countries that Senru Textile has cooperated with before are now unable to start operations, so orders are flowing to China. Additional orders include those from Europe and the United States, as well as those from Japan and South Korea. “In previous years, we exported one container per day on average from June to September. This year, affected by the epidemic, the export volume before September was significantly reduced. Now export orders have returned to 70% of previous years.” said the relevant person in charge of the company. After sending out nearly 400 containers in a row, Wu Yuntian, general manager of Tianyue Apparel in Jinjiang, Fujian, is still troubled by “happy troubles.” Customers have been “bombing” for several days in a row, and recently they even visited directly, hoping to “insert orders” in the already full-load production. Bentayga Apparel mainly sells underwear, socks and other products. Such daily consumables are less affected by the epidemic. Wu Yuntian said that many new orders have been returned from Southeast Asia recently. Due to the impact of the new coronavirus epidemic in the local area, many factories are unable to operate normally, so the orders have been transferred to China. There are a lot of reshoring orders from the United States, Europe, and Southeast Asia. So far, orders for Bentayga Clothing in the second half of the year have increased by 100% year-on-year, and foreign trade orders that are in short supply have been scheduled until April next year.
Many companies that were originally engaged in the domestic trade of textiles also received foreign trade orders during this order wave. Zhejiang Jinhua Henggang Home Textile Co., Ltd. recently received an order from the international fast-selling brand ZARA on Alibaba’s domestic trade platform 1688 for the first time. “The order is for hundreds of thousands of tablecloths, accounting for 60% of the company’s total output this year. This has caused the company’s turnover to surge five times compared to the same period last year. I did not expect to receive an order from ZARA. These tablecloths were previously sold in India. Produced.” said the relevant person in charge of the company.
In October, the export volume of textiles and clothing in Keqiao District, Shaoxing City continued to rise, and textile exports showed a month-on-month upward trend. When the epidemic caused a decline in the international market and blocked the international supply chain, my country’s epidemic prevention and control took the lead in achieving positive results. Relying on a complete industrial chain, supply chain system and stable high-quality supply capabilities, the textile industry not only worked hard to ensure the supply of international epidemic prevention materials , and effectively filled the gap in the international supply chain, met consumer demand after the restart of overseas economies, and export growth accelerated.
2
In October, the number of foreign trade orders continued to increase compared with the previous month. Demand in East Asia, West Asia, the Middle East and Africa, and the Americas continued to recover. South Africa, Demand in countries such as Brazil has also recovered, and orders from customers in European countries continue to be placed partially. The international market continues to expand, export orders continue to grow, the textile industry chain shows a “thriving” trend in the golden autumn of October, the foreign trade prosperity index rises month-on-month, and the foreign trade price index rises month-on-month.
(Picture 1)
(Figure 2)
As shown in Figures 1 and 2, the foreign trade prosperity index closed at 825.89 points in October 2020, a month-on-month increase of 7.16%, a year-on-year increase of 13.94%, and a year-on-year increase of 6.04%; the foreign trade price index closed at 167.38 points , up 2.73% month-on-month, down 0.65% from the beginning of the year, and up 1.33% year-on-year; the foreign trade confidence index closed at 1104.79 points, up 1.05% month-on-month.
1. Overseas markets continue to push up, and the foreign trade prosperity index rises month-on-month
In October, the prosperity index of foreign trade textile enterprises in Keqiao District, Shaoxing City rose month-on-month. In October, Keqiao’s textile industry saw steady development of domestic trade, and its foreign trade once again “rised against the market trend.” Among them: the foreign trade prosperity index of daily home textile fabrics increased by 77.88% month-on-month, the foreign trade prosperity index of curtains and curtains increased by 86.85% month-on-month, and the foreign trade prosperity index of impregnated, coated and coated textiles increased by 72.60% month-on-month, driving the foreign trade prosperity index to rise month-on-month. .
2. The prices of export products increased month-on-month, and the foreign trade price index rose month-on-month.
In October, the foreign trade price index showed a month-on-month upward trend. Among them: the foreign trade price index of cotton and its blended fabrics increased by 0.56% month-on-month; the foreign trade price index of daily home textile fabrics increased by 0.78% month-on-month; the foreign trade price index of curtains and curtains increased by 1.56% month-on-month; driving the overall foreign trade price index to rise month-on-month.
1. Suppliers’ bargaining power began to increase, and the export price index increased month-on-month. Due to the severe epidemic situation in India, smooth communication cannot be guaranteed.��, a large number of Indian textile orders have been transferred to China, and orders for both home textiles and clothing have increased. The market has improved, raw materials have increased significantly, and faced with a wave of rapid appreciation of the RMB, suppliers’ bargaining power has begun to increase. Textile and garment enterprises in Keqiao District are striving to refine, expand and strengthen their main businesses. At present, most large-scale enterprises are busy increasing varieties, improving quality and creating brands. The increase in foreign trade orders for innovative products drove the export price index to rise month-on-month in October.
2. The market has accelerated its recovery, and the export price index has increased month-on-month. Since the beginning of October, foreign trade orders have begun to surge. Export companies that mainly produce knitted fabrics have increased their orders for fabrics such as polar fleece, lambswool, flannel, and sweatshirt fabrics. Additional orders have been placed in Europe and the United States. There are also Japan and South Korea. Affected by the epidemic this year, export volume dropped significantly before September, but by October export orders had recovered to 70% of previous years. The market has accelerated its recovery, and the export price index has increased month-on-month.
3. All factories are operating at full capacity, and the export price index has increased month-on-month. In October, the upward trend of the market was very obvious. Customers place orders frequently and in large quantities, and some large-scale export textile companies have already scheduled production orders until the end of December this year. A fleece fabric produced by an export textile company in Keqiao was originally not planned to be the company’s flagship product based on market conditions; it actually became a hot item in October, with supply exceeding demand. Shipments in October increased by more than 60% year-on-year, and foreign customers are waiting for goods to be loaded every day. The export price index increased month-on-month.
3
As for the export situation in November 2020, it is expected that textile and apparel exports will show a slight upward trend month-on-month. Against the background of the global epidemic, my country has achieved significant results in epidemic prevention and control, and has taken the lead in macroeconomic recovery. The effects of the state’s policies to assist enterprises in bailing out, “six stability” and “six guarantees” continue to show, and will further improve the business environment, reduce the burden on enterprises, stimulate the vitality of market entities, and promote the economic operation of the textile industry to return to normal track. Keqiao Textile Industry continues to ride on the trend. On the one hand, it has insight into the market demand under the “dual cycle”, expands more domestic demand and foreign trade markets, increases the supply side, and makes product and technological innovation; on the other hand, the key is to strengthen Industrial chain effect to maintain the comprehensive competitive advantage of the textile industry. In November, it is expected that foreign trade orders will continue to increase compared with the previous month. Demand from East Asia, West Asia, the Middle East and Africa, and the Americas will continue to recover. Demand from South Africa, Brazil and other countries will continue to recover. Customer orders from European countries will continue to be placed. Foreign trade Orders will still increase slightly month-on-month.
4
Many textile and garment foreign trade factories suddenly experienced a surge in orders, and it seemed that a “spring breeze” was blowing across the entire industry. Although it is a good thing to have huge sales, the risks behind it cannot be ignored.
Due to the second outbreak of the new crown epidemic in European and American countries, more stringent control measures may be introduced in the future, resulting in a significant decrease in customer orders, and there is a risk of a significant reduction in subsequent orders. Moreover, due to the sudden market situation, manufacturing companies may face problems such as rising raw material prices, high labor costs, and insufficient production capacity.
Industry insiders pointed out that many foreign trade factories have closed down during the epidemic this year, and the economic crisis has become highlighted. Coupled with the U.S. tariff policy that may be about to reverse, the entire industry chain is panicking. The current sharp increase in raw material prices has made it difficult for many foreign trade factories to afford it. However, once the price of goods is raised, customers are unwilling to accept it, so many companies choose to bear the cost silently. In other words, although orders increased, companies made little profit.
There is no doubt that the surge in orders will be accompanied by an increase in raw material prices. Affected by the superposition of foreign trade and domestic demand orders, the price of textile raw materials has recently risen by about 20%. According to the China Cotton Association, as of October 20, the China Cotton Price Index (CCIndex3128B) was 14,923 yuan/ton, an increase of 2,126 yuan/ton from the average price in September, an increase of up to 16%.
In addition, the epidemic that has lasted for more than half a year has caused the loss of part of the labor force. Now orders have increased sharply, and labor costs have also risen. Relevant data shows that many factory labor positions are facing a “labor shortage.”
Insufficient production capacity is also a headache for many companies. Orders have increased sharply and delivery times are tight, but factories may not be able to ship on time. At the same time, they are also worried that tight orders may lead to quality problems and affect brand reputation.
At the same time, as the peak season at the end of the year approaches, foreign trade export orders have grown rapidly, resulting in a significant increase in international ocean freight, frequent cargo dumping, and further increased risks for export companies.
</p
