Recently, the second wave of epidemics abroad has been so fierce that several European countries have once again issued news of “lockdown”. Following this, many places have finally decided to cancel Christmas markets due to epidemic prevention considerations.
It is understood that the Christmas market usually starts in late November and ends on December 24 every year. There are no activities and no crowds are allowed to gather, which means that the consumption level during the Christmas season will be greatly reduced.
At the same time, according to sources, through investigations of more than 2,200 companies in France, Germany, Italy, Spain and the United Kingdom, if they If their income remains at the current level, 55% of companies are expected to go bankrupt by September next year, which means that more than half of foreign small and medium-sized enterprises will go bankrupt.
Beware of a second outbreak of the epidemic
Order cancellations
With the second outbreak of the epidemic in Europe, overseas countries have once again issued a “city closure” signal, which means that it will take some time for overseas consumption to recover, and demand in this area will decrease during the Christmas season, which was originally the peak sales season. , for the textile and garment industry, these news are like a “bolt from the blue”, giving another blow to the recovery of the industry. Textile people can no longer bear the tragedy of being cut off.
When communicating with the company not long ago, he said that his friends have had their orders canceled. European customers originally placed clothing orders for Myanmar and Vietnam to purchase them. fabric, but due to the epidemic, it has been canceled. “Two days ago, Myanmar customers also developed and imported, one batch was satin and the other was imitation memory. As a result, some of them have been made and the order was cancelled. It is not easy to make foreign trade orders now.”
Significant cost increases and exchange rate fluctuations
Textile companies’ profits have been squeezed and they are in a dilemma!
At the same time, according to industry insiders, due to the rapid rise in prices of textile raw materials, a large number of traders have adopted the strategy of “high quotation, low transaction”, holding back the market and waiting for the price to sell. , or even choose to break the contract; under the expectation of RMB appreciation, imported yarn is also in a “closed” state without quoting. In order to ensure production and delivery, a “fabric rush” has also begun in the textile industry. A person in the textile industry pointed out that with the skyrocketing prices of raw materials, cotton gauze, and fabrics, textile and clothing exports are in a dilemma.
First of all, at present, most foreign brands and retailers do not accept the increase in quotations from textile and garment enterprises and foreign trade companies. The increase in raw materials and gauze is difficult to pass on to end orders, and export-oriented enterprises cannot bear The capacity is relatively limited, so they have to either “abandon the order” or absorb the rising costs of cotton, cotton yarn, etc. on their own. No matter which choice they make, the production enterprises will be very painful.
Secondly, in August and September, many companies received orders for Thanksgiving, Christmas or “Double 11” domestic sales orders from European and American markets, and the prices of cotton, cotton gauze, etc. The increase has caused profits to significantly shrink or even fall into losses. These orders are likely to be unable to be executed. Textile and clothing companies are suffering between executing the contract or negotiating with the purchaser to terminate the contract or breach of contract.
Thirdly, due to concerns about significant fluctuations in the RMB exchange rate, export-oriented trading companies also tend to be cautious in accepting orders.
The epidemic is back again
The orders on hand cannot support the products that are in desperate need of food Prices
The skyrocketing quotations of raw materials, yarns, fabrics, etc. have inhibited the continued recovery of foreign trade demand to a certain extent. For example, many people in the textile industry said that customers would not accept the quotations based on the latest cost verification; on the other hand, traders complained that it was difficult to find processing companies with good supply quality and cheap prices. “Difficult to ship” has become the norm, so many export orders with low quotations and low profits have been abandoned.
Since the National Day holiday, news of the return of overseas orders has been rampant, which has led to a crazy counterattack in the entire textile market. After the dust has settled and we return to fundamentals, we will find that domestic “Double 11” orders have been delivered, orders from India are better than nothing, Christmas and New Year orders are now uncertain, prices of cotton, staple fiber and other raw materials have fallen from highs, and gauze prices Expectations for improving downstream demand are still high.
The epidemic is back with a vengeance. Can the orders you have in hand still support the prices of the products that are waiting for you?
</p
