Why Do Foreign Textile Enterprises Reluctantly Give Up Long Dan Dadan?

Carrying the pressure of RMB appreciation, Zhejiang has many foreign trade Textile companies took part in the three phase of the Canton Fair closed last week, but they were more anxious to digest the comprehensive cost of exchange rate changes compared with the harvest orders. At present, foreign trade enterprises are cautious about long lists.

Taizhou Hanfeng import and Export Co., Ltd. is mainly engaged in the export of handicrafts. Hong Hong, the company's manager, told reporters that the average profit per export of an ordinary product is less than 1 yuan. If the time of delivery and the period of payment are extended, profits will be reduced as a result of the appreciation of the renminbi.

The exchange rate is closely related to sales. For example, a foreign trade enterprise has an annual sales volume of US $10 million. In the calculation of US $10 million, the exchange rate of RMB to us dollar in January 1, 2011 is US $6.621000, which can be exchanged for RMB 66 million 200 thousand yuan. According to the April 29th exchange rate of 1 US dollars to RMB 6.499, the 10 million US dollar can be exchanged for RMB 64 million 990 thousand yuan, which is only 1 million 210 thousand yuan in 6.499 3 months.

　　 RMB appreciation Many foreign trade enterprises have broken the hope of "overcharging 35 companies". "How much RMB appreciation, the cost of enterprises will rise directly." When asked about the RMB exchange rate, most business executives sighed repeatedly. In 2010, the appreciation rate of RMB against the US dollar was 3.1%. Less than 1/4 of the cost brought by the appreciation of the renminbi can be passed on to merchants. Most of them are absorbed by the export enterprises and the profit margins have dropped sharply.

"Prices of raw materials and appreciation of the renminbi make it very prudent for customers to place orders," the last five thousand or six thousand. Order Now it has become a small order of one thousand pieces. " The manager of Foreign Trade Department of Zhejiang fester Garments Co., Ltd. said that the company is now avoiding risks through the validity period and flexible exchange rate. Apart from letting merchants become "petty", the appreciation of the renminbi has also led to an embarrassing situation that orders are not available, and big orders have become "hot potatoes".

"Small businesses are not sure about the trend of the renminbi. They worry that the more they sign, the more they will lose." Hangzhou City Foreign Trade and Economic Cooperation Bureau official admitted that the current textile and garment enterprises gross profit margin is only about 3 ~ 5%, large single, long single delivery settlement period of up to six months or one year. It is understood that at present, most enterprises receive orders for delivery settlement within 3 months, and those with longer delivery times can only give up reluctantly.