The COVID-19 epidemic sweeping the world has caused severe damage to the economy and life. The development of the international epidemic has caused the global supply chain to be cut off, and the movement of people and materials has been restricted. my country’s textile companies have experienced behaviors such as canceling orders and abandoning goods, and cotton consumption has basically come to a standstill.
The rollercoaster-like market turmoil has made small and medium-sized enterprises worried about their livelihood. As the spread of the epidemic intensifies, domestic and foreign textile consumption shrinks, and the prices of various textile products fall step by step. After the Spring Festival, the quotations of raw materials such as cotton fell rapidly to an unprecedented extent. Textile companies continued to purchase raw materials as they were used, and tried their best to keep the inventory of raw materials and commodities at a low level. During the communication with textile enterprises, we learned that even small and medium-sized textile and garment enterprises that are “small boats are easy to turn around” can only use the most primitive but most effective self-protection measure, that is, to maintain the same quantity of production based on orders, and keep the situation in the market. The textile raw materials in the warehouse are controlled within a very short production cycle, and the inventory of finished products is kept within five days. In terms of operations, they would rather not make a deal than get credit. It can be seen that companies are doing their best to avoid risk losses under the shadow of the epidemic.
Without new orders, companies are unwilling to fight. What is more frightening than falling prices is the “shutdown” of business operations caused by the spread of the global epidemic. In early April, the author communicated with seven small and medium-sized textile enterprises in Yancheng and Nantong, Jiangsu Province, which owned about 20,000 spindles, and learned that these enterprises resumed work as early as February 15, but did not resume production in the true sense until the end of February. Unexpectedly, just when they were looking for rice to cook in the market, the global epidemic spread and intensified day by day. A large number of cotton spinning companies were faced with the cancellation or delay in signing of the original sequential orders, and there was no clear date for restarting. Among the seven companies surveyed, six said they would complete all orders for this year by late April. Although most companies are currently maintaining production, the days before shutdown are just around the corner. Since there are no new orders, they have given up purchasing raw materials and have no intention of competing in the low-price sales market.
Delisting and waiting, small and medium-sized enterprises have a difficult choice. Enterprises reported that it was not that there were no orders at all. The only orders were for smaller batches, but they required significant reductions in production capacity. Some companies had to take orders in order to maintain customers, but it was not easy to adjust production capacity. However, it is also necessary to consider efficiency. Faced with this “hot potato”, small and medium-sized textile enterprises are really embarrassed. Because small businesses are small in size and have average strength, when the global economic trend changes drastically due to disasters, they are really under tremendous mental and material pressure, and their ability to find a way out is relatively weak.
As of mid-April, the momentum of the global epidemic is still high, and prevention and control measures in European and American countries, China’s major textile trading partners, are still increasing their efforts. The upgrade of these measures will undoubtedly also cut off foreign trade operations such as textiles. of. At present, almost every day, small and medium-sized enterprises press the pause button again due to order interruptions. It is still unknown what the market adjustment and consumption recovery will look like after the epidemic is hit hard. In the days to come, how small and medium-sized textile enterprises will be reshuffled and whether they can achieve rebirth will be an anxious expectation in the industry. </p
