China'S Textile And Garment Export Orders Increase, Profits Reverse Compression

A garment that costs $4 in production, but buyers in South America or Africa are only willing to bid for $3.5. Big customers do not come and small customers offer too low, making Chinese textile and garment export enterprises beset with difficulties. On the surface, orders are increasing, but profits are decreasing, and export risks will increase in the coming months.

Hou Wensheng, director of the Guangdong textiles import and export Limited by Share Ltd, told us that the third phase of the Canton Fair was relatively small in Europe and America, mainly in the Middle East, southern Africa and Africa. Now there are a lot of orders. The problem is that it is difficult to find suitable factories to produce.

"For example, a garment, the factory gave us the quoted price of 4 dollars, the customer only willing to give us $3.5, and there is also about 10% difference in the middle, which means that our foreign trade companies not only have no money to make money, but also make fixed losses. Such orders will definitely not be answered." Hou Wensheng complained that the total cost has increased by 15% this year, and the purchasers' bid is very low. Such a "low price" order is not ready for the factory to receive. Due to the lack of work, many factories have already been placed in production orders in 7 and August.

A business manager of Kaiyuan International Group of Jiangsu also remarked that they did not expect major European and American customers, while some small customer orders were reluctant to accept them. Although clothing orders increased over the same period last year, export risks such as exchange rate, cost and delivery date were also increasing. At present, the net profit of the enterprise's clothing is also 3%~5%, which is affected by the price reduction competition of some small enterprises in the Canton Fair, so that the order price can not keep up with the speed of the cost increase, and the profit will continue to be explored. In order to avoid exchange rate risk, most of them try to catch up with the delivery date. But at present, the garment industry is short of work. It is expected that production clogging will occur during the peak period of [7.731.05%] shipment of 7~9 clothing in China. Some enterprises will be faced with payment for compensation because they can not deliver the goods on time.

A number of garment export enterprises have reflected that the major clients in Europe and the United States are less than expected, raising the difficulty of raising prices. The purchasers of Asia, America, Oceania and Africa have increased to varying degrees in the first phase of the Canton Fair. However, the number of participants in Europe and the United States dropped by 5.2% and 4.94% respectively compared with the previous period. The two period was affected by the Iceland volcano, and the EU customers fell more than 20%. The third stage is still not many customers in Europe and America.

Enterprises believe that this has nothing to do with the European and American retail market. According to the 4 daily report of the German Statistical Bureau, the retail sales in March fell by 2.4% compared with February. The forecast was flat for the month, indicating that domestic demand remained weak in the context of higher uncertainty in the job market.

According to the statistics of the China Textile Import and export chamber, as of 3, the total turnover of the textile and clothing hall was $2 billion 408 million, an increase of 11.7% over the previous Canton Fair. From the perspective of market structure, transaction growth in Europe and America is slower than the overall level. The European market was trading at $526 million, an increase of 6% over the previous session, and the US market was trading at $197 million, an increase of 3.1% over the previous session. In other markets, Africa grew fastest and traded at 60 million US dollars, an increase of 29% over last year.

The China Textile Import and export chamber has mentioned that the price of labor and raw materials has been rising, and the cost risk of enterprises has increased. At present, the labor cost in China is 2 times that of India and 3 times that of Vietnam. The advantages of cheap labor are losing, but export prices are difficult to upgrade, and the survival of enterprises is difficult. Strengthening the R & D design capability, enhancing the added value of products and enhancing the bargaining power of foreign companies have become a strategy for many enterprises to cope with the crisis. However, a number of enterprises continue to participate in the exhibition with low price and low grade products, and the negative effects brought by them should be concerned.