Apparel / Textiles & Accessories

Recently, the price of raw materials has reappeared after the Spring Festival this year. With the influence of factors such as the global epidemic, international freight, and RMB exchange rate, the profits of textile companies have been continuously compressed. Some companies said that "everyone is rushing to make orders that make a few cents."

However, in response to the increase in commodity prices and the pressure on corporate profits, the government also responded. my country’s industrial production capacity is relatively strong, and the supply capacity of industrial products is relatively sufficient. The relevant departments have implemented the policy of ensuring the supply and stabilization of domestic commodity prices. The effect is currently In the initial manifestation. Therefore, the overall impact of rising prices of industrial products is controllable.

At the same time, new business formats and new models are becoming new driving forces for the transformation and upgrading of my country's foreign trade and high-quality development.

Multiple factors cause corporate profits to be squeezed

In the first week of July, the Taihu Lake Shading Cloth Home Textile Chamber of Commerce in Siyang County issued a notice to 100 shading cloth members that recently stimulated by the rebound in international crude oil prices, the price of chemical fiber raw materials has risen, and the cost of downstream weaving companies has continued to rise, and profits have been repeatedly squeezed. Pressure. For this reason, it is recommended that all members increase the price of the original product by 0.5-1 yuan/meter according to different weights. The increase is not the profit but the cost.

This type of notice also appeared when raw materials rose significantly after the start of the Spring Festival this year. However, Shen Jian, deputy general manager of Suzhou Shengze Silk Chemical Fiber Index Monitoring and Publishing Platform Sudu.com, said that although raw materials have recently reproduced the rise after the Spring Festival, there are still a few fabric companies in the market that raise prices.

"It is difficult for the price to rise because customers do not accept it." Li Changchun, manager of Suzhou Wujiang Weihua Textile Co., Ltd., said that the current orders are basically the same as before the epidemic, but there were still some profits before. "We used to make a dime on orders. I’m too lazy to do it. Now everyone is rushing to make orders that make a few cents."

From late June to early July, in less than half a month, the price of textile raw materials has been raised no less than 6 times.

The relevant person in charge of the chemical fiber sales department of Hengli Group, a leading Chinese textile manufacturing company, said that since July, DTY (stretched textured yarn), POY (pre-oriented yarn) and FDY (full stretched yarn) have increased by 500 yuan. -800 yuan per ton. Among them, driven by the domestic demand market, the two products, DTY and POY, rose the most, with a cumulative increase of 3,000 yuan per ton in the first half of this year.

The person in charge said that the reason for the price increase is mainly due to the upward fluctuation of international oil prices and the impact of upstream costs. The FDY products, which are mainly supplied to the foreign trade market, have been affected by repeated overseas epidemics, tight container supply, and sharp rise in freight rates.

In addition, Meng Zhuo, manager of Anhui Garment Import and Export Co., Ltd., said that in addition to negotiating price increases with customers, it may not always be possible, but also because some of the orders returned to China are part of Chinese companies that could have been produced in Southeast Asian factories. But because of the epidemic, it had to be taken back to China. Domestic production costs are definitely higher than those of these factories in Myanmar. Coupled with factors such as international freight, the increased costs of these products will inevitably further erode the profits and even costs of enterprises.

Meng Zhuo also said that due to the long international shipping cycle, orders for this autumn and winter must be completed before July, and they were also received in October last year. For the order to be received now, not only the lock-in, but also the factor of the increase in shipping fees must be considered. In the contract, it is necessary to plan how the increase will be shared.

According to Meng Zhuo's observations, this year's clothing factories are mainly in tight production, and "the list is endless." The fabric factory belongs to the off-season, even the peak season is not as good as before.

The China Chamber of Commerce for Import and Export of Textiles disclosed on July 13 that in the first half of the year, China's textile and apparel exports in RMB and US dollars increased by about 3% and 12% year-on-year, respectively, and maintained rapid growth compared with the same period in 2019. Among them, textiles suffered from a year-on-year decline in the impact of masks, and clothing grew rapidly driven by a rebound in external demand.

In RMB terms, from January to June 2021, textile and apparel exports totaled 908.87 billion yuan, a year-on-year increase of 3.27%, of which textile exports were 444.85 billion yuan, a year-on-year decrease of 14.63%, and clothing exports were 464.02 billion yuan, a year-on-year increase of 29.25%.

The rise in industrial product prices is generally controllable

Speeding up the development of new formats of foreign trade

Regarding the continued increase in commodity prices and the pressure on the profits of small and medium-sized enterprises, Liu Aihua, spokesperson for the National Bureau of Statistics and Director of the General Statistics Department of the National Economy, said at a press conference of the State Council Information Office on July 15 that international commodity prices are importing. The upward pressure of China still exists, but my country’s industrial production capacity is relatively strong, and the supply capacity of industrial products is relatively sufficient.

According to data released by the National Bureau of Statistics, the producer price (PPI) of industrial producers rose by an average of 5.1% in the first half of this year, an increase of 3 percentage points from the first quarter.

Liu Aihua analyzed that the increase in ex-factory prices of industrial producers in the second quarter was mainly due to several factors. First, the economy continues to recover, and demand continues to expand. The second is the imported impact of rising international commodity prices. In June of this year, the international energy price index rose by 92.6% year-on-year, and the non-energy price index rose by 43.2%, both of which were relatively high. The third is the impact of the low base in the same period last year. Affected by the new crown pneumonia epidemic, the PPI has continued to decline since February last year. In the second quarter, the price of each month has dropped by more than 3% year-on-year. Therefore, the year-on-year increase in the PPI in the second quarter of this year has increased significantly. Brings a relatively large cost pressure.

But he also said that the relevant departments have recently implemented the policy of ensuring the supply and stabilization of domestic bulk commodity prices, and the effect is currently showing preliminary results. The factory price of industrial producers in June rose by 8.8% year-on-year, which was 0.2 percentage points lower than that in May. Therefore, the overall impact of rising prices of industrial products is controllable.

At the same time, my country's foreign trade development in the first half of the year produced a good report card. According to data released by the General Administration of Customs on July 13th, in the first half of the year, my country’s import and export scale of 18.07 trillion yuan hit the best level in the same period in history, and it has also increased by 22.8% compared with the same period in 2019. The monthly import and export has been 13 consecutive years. The year-on-year positive growth was achieved in the previous month, and the steady growth of foreign trade was further consolidated.

However, foreign trade companies including textiles and small and medium-sized enterprises in the supply chain still face many challenges.

Assistant Minister of Commerce Ren Hongbin stated at the State Council’s regular policy briefing held on July 12 that my country’s foreign trade development situation is still complicated. From an international perspective, the global epidemic situation is still severe, economic recovery is uncertain, industrial chain supply chain risks have increased, and trade issues have become more politicized. From a domestic perspective, my country's foreign trade companies still face many outstanding difficulties.

Ren Hongbin believes that from a domestic perspective, my country's foreign trade companies face four major difficulties. The first is the low efficiency and high prices of international shipping; the second is the increased fluctuations in the RMB exchange rate, and the phenomenon of "they do not dare to receive orders, and the export is not profitable"; the third is the increase in raw material prices, which raises the cost of the company; the fourth is the recruitment of workers in some regions Difficult and expensive.

However, the "Opinions of the General Office of the State Council on Accelerating the Development of New Types and Models of Foreign Trade" was formally issued recently. The opportunities and new momentum for the transformation and upgrading of foreign trade and high-quality development also come from these new formats and new models.

Data shows that the scale of my country's cross-border e-commerce has increased by nearly 10 times in 5 years, and the scale of market procurement trade has increased by 5 times in 6 years. There are more than 1,500 comprehensive foreign trade service companies, more than 1,900 overseas warehouses, and about 130 bonded maintenance projects for processing trade have been completed.

Zhang Kuo, vice president of Ali Group and general manager of International Station, said that since last year, a large number of small and medium-sized enterprises have not been able to get deterministic cabinet shipments, resulting in delays in large-scale online orders. At this time, relatively intensive and digital solutions are especially needed. . In this regard, they have extended their services to freight forwarding and international logistics since last year.

The background data of Alibaba International Station shows that the sea and land business, that is, the shipping volume of sea containers, increased by 9 times from last year in April and May this year. In addition, compared with the same period last year, the order volume of the air express business from January to May this year has increased by 88%, and the weight has increased by 100%.