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Interest Rate Increases The Profit Of China'S Textile And Garment Industry, And The Pressure On China'S Textile And Garment Enterprises Is &Nbsp.

2010/10/21 15:46:00 42

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textile industry

The investment in fixed assets is generally small and the debt ratio is low. In principle, a 0.25 percentage point increase in interest rate has little impact on this non capital intensive industry.

However, a number of textile and garment enterprises interviewed by reporters yesterday said that they were affected by the cost of raw materials, labor and other costs.

Bao Songjin, general manager of Ningbo Tian Hui Textile Co., Ltd., yesterday interviewed by our reporter, said that although business loans were not much, raising interest rates would still increase costs, making it difficult for the 108th Canton Fair's textile and clothing export orders to start in October 31st.

The rising price of raw materials and exchange rate fluctuations will be more and more difficult to bear according to the current order price. The enterprise will prepare to raise the price across the board at this Canton Fair. The plan has been basically completed. Now the interest rate rises suddenly, and how to integrate the factor to raise the price comprehensively requires careful consideration.

"This year, because of the rising cost of raw materials and so on, we have been adjusting prices frequently. Customers complain that if the unit price continues to rise, the order will be pferred to Bangladesh, India or Vietnam.

Our price competitive advantage is becoming weaker and weaker, so the price increase is risky.

Bao Songjin said.

This year, China's textile industry

Clothing enterprise

On the one hand, both domestic and foreign markets are growing side by side, while the other side is fast rising prices of raw materials. Most of the enterprises are losing their profits in the case of orders growth.

As one of the main raw materials of clothing and textile industry, cotton prices are rising rapidly. China's cotton price index shows that September is the peak of cotton price rising again.

In September 1st, the cotton price was 18002 yuan / ton, and the price rose to 22684 yuan / ton in September 30th, rising nearly 5000 yuan. Cotton price rose 13% in the short five days after the National Day holiday; cotton price has reached 24526 yuan / ton as of October 19th.

The price of clothing, accessories, polyester, chemical fiber, polyester fiber, artificial cotton and wool has also increased to varying degrees, of which viscose staple fiber prices have recently exceeded 22000 yuan / ton historical high.

Wang Yisheng, director of Lotte children's clothing, said that the price of raw materials increased by more than 30% in the past few months, but the price increase to customers was only about 10%. Most of them were digested by themselves. At present, both domestic and foreign markets are hard to raise prices for customers, and jeans and other products are not profitable at all.

Raising interest rates will undoubtedly further increase operating costs and eat up the last pitiful profits of textile and clothing.

Increase interest

The impact is obviously more than that.

Xu Yuping, general manager of Shenzhen gure Fashion Co., Ltd., said that the impact is divided into two levels: on the one hand, the increase in interest rate leads to the increase in costs, which further leads to a decline in profits, especially for orders that have already signed contracts. This year, the cost of labor in the Pearl River Delta has risen sharply. 20%~30%, raw material prices have gone up all the way, the profits of textile and garment industry are being explored, and interest rates continue to cut down the small profits of enterprises. On the other hand, interest rate hikes will increase domestic mortgage pressure, and consumers will probably reduce their consumption of clothing and other aspects because of increased housing pressure, which may drag on the growth of the clothing market in the country.