Canton Fair: Appreciation Of RMB, Textile And Clothing, European And American Merchants, Traces Are Hard To Find

It is known that due to the sharp reduction in export profit margins, some foreign trade enterprises have been fighting in the domestic market collectively to reduce export risks. However, there are also exporters who continue to stay at the base camp and begin to make agreements with foreign buyers to avoid hedging and avoid large fluctuations in paction costs.

The 103rd Canton Fair, though official said that the booths were 3667 more than the previous one.

However, many exhibitors feel that the atmosphere is not as good as they used to be, and the number of foreign visitors present has also decreased.

In addition to strict restrictions on the enthusiasm of some customers, the domestic export situation has been tight in recent years. Especially for many export enterprises, how to deal with the appreciation of the renminbi and the change of the exchange rate has become the top priority for enterprises.

However, several days later, he admitted that he had not received half of the order yet.

"There are fewer foreign guests in the textile and clothing exhibition area. The European and American customers are hard to find. They may be related to the new high of the renminbi. They are all guests in Africa or the Middle East. They especially like bargaining, which is not easy to talk about."

Because the company did not plan to give up its long-standing export business, it has been increasing the value of RMB and rising raw materials in the past two years.

Mr. Lai said, "almost everyone in the industry had touched nails before, and now they are smart enough to learn.

In order to deal with the fluctuation of RMB exchange rate flexibly, the company has changed the 30 day effective contract to 15 to 20 days' validity period, shortening the cycle of time to reduce the impact of exchange rate changes, and each contract will indicate the validity period and price validity period of the contract.

As a result, the signing of long and short term contracts and the additional provisions of Renminbi appreciation in the contract have become effective measures adopted by the vast majority of domestic enterprises.

Once the exchange rate is agreed, even when the dollar is depreciated, banks will pay the dollar to the enterprises at the agreed rate.

But banks have a business threshold for the implementation of this policy.

However, the difference between the company and the new customers and small customers is that they usually sign two or three months' short-term contracts, and only make advance cash pactions. As for the old customers and some large customers, they will sign longer time and pay the payment method in advance.

Enterprises can use non financial means to avoid risks when signing contracts.

When there are no quotas, no dollar is used as the currency of the paction, and other strong currencies such as euro, Australian dollar or RMB are used to sign the contract.

This not only can avoid risks, but also has some benefits.

According to the different way of settlement, the lowest quoted price is RMB, the euro is second, and the US dollar is the highest, but the final "knocking" must follow customer's wishes.

The most direct impact of the depreciation of the US dollar is that the export quotas need to increase 10% to 20% to maintain fixed profits, but at the same time, the volume of exports is reduced by nearly 30%-40%.

As a businessman has said, compared with a year ago, an enterprise exports 1 US dollars, the profit will be reduced by three to 40%.

This has been reflected in the fact that the low value-added export commodities of 1 to 2 US dollars are not accepted by enterprises.

Xu Sheng, a buyer who participates in the Canton Fair, is a business representative of Shenzhen shoe trading company.

"Our company has always been engaged in the trade of OEM shoes and shoes, but after attending several exhibitions at home and abroad last year, it has obviously felt the pressure from the European Union and the United States, which requires all products to have their national recognized quality standards.

To this end, many customers have reduced the volume of purchases, and the cooperative factories have been complaining.