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Foreign Trade and Export|Domestic trade companies can also receive fast fashion orders, how long can the order wave last?

November 25, 2020
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Since the second half of this year, despite the global epidemic, demand in overseas markets is still high.

 

Recently, many textile foreign trade factories in our country have seen a burst of 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 apparel foreign trade companies are still facing many risks and problems. In addition, with the recent rebound of the overseas epidemic, the risk of foreign trade exports has increased, and we must be cautious while optimistic.

 

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Since the second half of this year, despite the global epidemic, demand in overseas markets is still high.


Since the beginning of October, Shaoxing Keqiao Senru Textile Co., Ltd.’s foreign trade orders have soared, and customers continue to add orders every day. The company mainly produces knitted fabrics, such as polar fleece, lamb fleece, flannel, sweater cloth and so on.


The textile factories in India and Bangladesh that Senru Textile has previously cooperated with cannot start operations, so orders flow to the country. Additional orders include European and American ones, as well as Japanese and Korean ones. "From June to September of the previous year, we exported an average of one container per day. This year, the export volume was significantly reduced before September due to the epidemic. Now export orders have returned to 70% of the previous year." The relevant person in charge of the company said.


After shipping nearly 400 containers in a row, Wu Yuntian, general manager of Fujian Jinjiang Tianyue Apparel, is still troubled by "happiness troubles". Customers have been "bombing" for several days, and recently they have visited directly, hoping to "insert orders" in the already full production.
Tianyue Clothing is mainly engaged in underwear, socks and other products. Such daily consumables are less affected by the epidemic. Wu Yuntian said that there have been many new orders returning from Southeast Asia recently. Due to the impact of the new crown pneumonia epidemic in the local area, many factories cannot operate normally, so the orders have been transferred to China. There are many return orders from the United States, Europe and Southeast Asia. So far, orders for the second half of Tim Yuet apparel have increased by 100% year-on-year, and foreign trade orders that are in short supply will be scheduled until April next year.


Many companies that were originally engaged in the domestic textile trade business also received foreign trade orders during this order wave. Zhejiang Jinhua Henggang Home Textile Co., Ltd. recently received an order from the international fast-moving brand ZARA on Alibaba's domestic trade platform 1688. "The order is hundreds of thousands of tablecloths, accounting for 60% of the company's total output this year. This makes the company's turnover this year soared by 5 times over the same period last year. I did not expect to receive an order from ZARA. These tablecloths were previously in India. Produced.” The relevant person in charge of the company said.


In October, the export volume of textiles and clothing in Keqiao District, Shaoxing City continued to rise, and the export of textiles showed a month-on-month rise. In the case of the international market decline caused by the epidemic and the international supply chain is blocked, my country's epidemic prevention and control has taken the lead in achieving positive results. The textile industry relies on a complete industrial chain, supply chain system and stable high-quality supply capabilities to not only strive to ensure the supply of international epidemic prevention materials , And effectively made up for the gap in the international supply chain, met consumer demand after the restart of the overseas economy, and accelerated export growth.


 
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In October, 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. Demand in South Africa, Brazil and other countries also recovered. Customer orders from European countries continued to be placed locally. The international market continued to expand, export orders continued to grow, and the textile industry chain showed a "prosperous" trend in October. The foreign trade prosperity index increased month-on-month, and the foreign trade price index increased month-on-month.

 

The foreign trade prosperity index in October 2020 closed at 825.89 points, an increase of 7.16% from the beginning of the year, an increase of 13.94% from the beginning of the year, and an increase of 6.04% year-on-year; the foreign trade price index closed at 167.38 points, an increase of 2.73% from the previous year, and a decrease of 0.65% from the beginning of the year, year-on-year Increased by 1.33%; the foreign trade confidence index closed at 1104.79 points, an increase of 1.05% from the previous month.


 

Overseas markets continue to rise, and the foreign trade prosperity index rises month-on-month


In October, the prosperity index of foreign trade textile enterprises in Keqiao District of Shaoxing City rose month-on-month. In October, with the stable development of domestic trade in Keqiao textile industry, foreign trade once again "rised against the market." Among them: the foreign trade prosperity index of daily-use home textile fabrics rose 77.88% from the previous month, the foreign trade prosperity index of curtains and drapes rose 86.85% from the previous month, and the foreign trade prosperity index of impregnated, coated and covered textiles rose 72.60% from the previous month, driving the foreign trade prosperity index to rise from the previous month. .
 

Export product prices rose month-on-month and foreign trade price index rose month-on-month


In October, the foreign trade price index showed an upward trend from the previous month. Among them, the foreign trade price index of cotton and its blended fabrics rose 0.56% from the previous month; the foreign trade price index of daily-use home textile fabrics rose 0.78% from the previous month; the foreign trade price index for curtains and curtains rose 1.56% from the previous month; the total foreign trade price index increased from the previous month.
 

1. Suppliers' bargaining power began to increase, and the export price index rose month-on-month. Due to the serious epidemic situation in India, smooth delivery 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 risen sharply, and in the face of a rapid appreciation of the renminbi, suppliers' bargaining power has begun to increase. The textile and garment enterprises in Keqiao District have become more refined, bigger and stronger in 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 promoted the month-on-month increase in the export price index in October.
 

2. The market has accelerated its recovery, and the export price index has risen month-on-month. Since the beginning of October, foreign trade orders have increased sharply. Export companies that mainly produce knitted fabrics have increased their foreign orders, and have increased their foreign orders for fabrics such as polar fleece, lamb fleece, flannel, and sweater cloth. Additional orders are in Europe and the United States, There are also Japan and South Korea. Affected by the epidemic this year, the export volume fell sharply before September, but by October export orders had returned to 70% of previous years. The market accelerated its recovery, and the export price index rose month-on-month.
 

3. All the factories are operating at full capacity, and the export price index rises month-on-month. In October, the market's upward momentum was very obvious. The frequency of customer orders is high and the order volume is large. Some large-scale export textile enterprises have already scheduled the order production by the end of December this year. A fleece fabric produced by an export textile company in Keqiao, originally based on market conditions, the company no longer planned to be the main product; it became a hot product in October, and the supply was in short supply. Shipments in October increased by more than 60% year-on-year, and foreign customers were waiting for goods to be loaded every day. The export price index rose month-on-month.

 
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Regarding the export situation in November 2020, it is expected that textile and apparel exports will show a slight increase from the previous month. In the context of the global pandemic, my country's epidemic prevention and control has achieved significant results, and the macroeconomic recovery has taken the lead. The effects of the state's policies to help enterprises to relieve their difficulties, the "six stability" and the "six guarantees" will continue to appear, 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. Keqiao textile industry continues to ride the wind. On the one hand, it has insight into the market demand under the "double cycle", expands more domestic and foreign markets, increases the supply side, and does a good job in product and technological innovation; on the other hand, the key is to strengthen The industrial chain effect maintains 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 in East Asia, West Asia, the Middle East and Africa, and the Americas will continue to recover. Demand in South Africa, Brazil and other countries will continue to recover. Customer orders from European countries will continue to be placed. Orders will continue to increase slightly from the previous month.


 
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Many textile and garment foreign trade factories suddenly burst orders, and it seems that the whole industry is blowing a "spring breeze". Although it is a good thing to burst orders, 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 sharp drop in the number of orders placed by customers, and there is a risk of a substantial reduction in subsequent orders. Moreover, in the sudden market situation, manufacturers 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 prominent. Coupled with the US tariff policy that may be about to come back, the entire industry chain is in panic. The current sharp increase in raw material prices makes it difficult for many foreign trade factories to bear. However, once commodity prices are raised, customers are unwilling to accept it. Therefore, many companies choose to bear the cost silently. In other words, although orders have increased, companies have made little profit.
There is no doubt that the first thing that accompanied the surge in orders was the rise in raw material prices. Affected by the superposition of foreign trade and domestic orders, the prices of textile raw materials have 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 per ton from the average price in September, an increase of 16%.


In addition, the epidemic that has lasted for more than half a year has caused the loss of part of the labor force. Today, orders have increased sharply, and labor costs have also risen. Relevant data shows that many factory labor-type jobs are facing a "labor shortage".


Insufficient production capacity is also a headache for many companies. Orders have soared and delivery time is tight, but the factory may not be able to ship goods on time. At the same time, they are worried that the tight order will cause quality problems and affect brand reputation.


At the same time, as the peak season at the end of the year approaches, the rapid growth of foreign trade export orders has caused a substantial increase in international ocean freight, frequent occurrences of container explosions, and further increases in risks for export companies.
 

(This article is reproduced on the Internet, the purpose is to spread the knowledge of the apparel industry, it does not represent the company's point of view. If copyright issues are involved, please contact us within 30 days, we will delete the article as soon as possible.)

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