“Foreign trade collapsed in the first half of the year. We even closed factories in other places. In September, we actually received 36 million meters of peach skin orders for export. There are a total of 250 cabinets in Brazil. Now all the looms are running at full capacity and there is no time to make them. We have also found several factories to process them. There will definitely be no holidays during the National Day.” A person in charge of an industry and trade enterprise that makes peach skin velvet said excitedly.
The current market is unpredictable. Some companies are so busy working overtime all night to catch up, while others Companies are still in vacation and rotation mode. How is the market doing?
Foreign trade orders are picking up, and the recovery situation is different in different regions
Foreign trade has been at a standstill in the first half of this year, and most traders have Received a chargeback notice from a customer, unless it is some private brand. But in the second half of the year, the situation began to change. Some countries began to place concentrated orders, such as the Middle East Arab region and the aforementioned Brazil region. The epidemic situation in these countries has been basically controlled, and the demand of their own people is also great. Therefore, whenever The orders are usually hundreds of thousands of meters or even hundreds or tens of millions of meters, and the varieties involved are some conventional and cheap fabrics, such as sajima, peach skin, pongee, etc., and every meter of fabric is obtained by the manufacturer. The profit is not much, but the success lies in the large quantity. A trader exporting to the Middle East said: “I have several proofs on hand now, and I should place orders later.”
In stark contrast to these countries are European and American countries. After research, orders exported to European and American countries are mainly high-quality and small. Mainly based on orders, it is rare to place such a large order at once, and customers’ requirements for fabrics are also notoriously high, because there are often situations where the final payment is withheld if the requirements are not met.
A salesperson doing Southeast Asian orders said: “Although European and American orders The profit is very considerable, but customers are very picky about the texture and color of fabrics. Our company has received an order from Europe and the United States before, but they were not satisfied with the color. A lot of the balance was deducted and the energy spent was huge. If We are not very confident, and we don’t dare to take orders from Europe and the United States.” However, some traders who are used to doing orders from Europe and the United States are able to handle it with ease. A trader from a brand clothing company exporting to Europe and the United States revealed: “We all follow the 20% profit margin. -30% quotation has been accepted by customers, and now customers are slowly returning to placing orders, although the order volume is definitely less than last year.”
Currently The peak season for foreign trade has arrived, so orders are being placed one after another in European and American countries, the Middle East, South America and other places. The recovery of orders in different regions is different. As foreign trade orders pick up, textile people still have certain worries. .
Receipt and delivery risks, beware of buyers “disappearing”
Although foreign trade is slowly getting on track, the epidemic The impact has been huge. The weak demand has caused a major blow to the global textile industry. Many foreign trade companies are struggling to hold on and their financial situation is very tight. Many clothing companies and foreign trade companies have seen their capital chains break and go bankrupt. In the first half of this year, there were many cases of customers going bankrupt and unable to pay the balance. Now many foreign trade customers have longer billing periods than in previous years. Textile workers need to reasonably control the billing period to ensure that they can recover their accounts at the end of the year.
In addition, there are signs of a rebound in the epidemic in Europe. Once a second epidemic breaks out, these countries are likely to adopt “city closures” again, and it is very likely that orders will face a second cancellation or suspension. There may even be cases where the goods arrive unclaimed at the destination port. Can foreign trade companies that experienced the first cancellation of orders still be able to withstand this second wave? Moreover, in many contracts, there is no explanation of the customer’s breach of contract, and the penalty ratio generally does not exceed 10%, which is difficult to offset the costs already paid.
Whether it is the previous Sino-US trade war or the current COVID-19 epidemic, it will be a protracted war. Professor Zhang Wenhong recently pointed out that the new coronavirus has become a “resident virus” existing in the human world and is still in the pandemic stage around the world. Therefore, whether at home or abroad, “small sparks of the epidemic” may appear in some areas, and foreign trade There are still many uncertainties. Although foreign trade orders are currently picking up, we cannot take it lightly. Textile companies must do a certain amount of risk control.
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