Exchange Rate Fluctuations &Nbsp; Textile Exports Encounter "Warm Boiled Frog"

Since August, the RMB against the US dollar.

The impact of US dollar exchange rate on settlement is great.

In September 1st, according to the relevant exchange rate data, 1 US dollars amounted to 6.3765 yuan.

It is understood that since entering August, the RMB exchange rate against the US dollar has trotted all along, breaking even 6.44, 6.43 and 6.42, and entering the "6.3" era.

This makes the textile exporters highly sensitive to the change of exchange rate more upset.

"Our enterprises are greatly affected by foreign exchange," a person from a large textile import and export company in Hebei told reporters. Because they are simply making foreign trade, receiving goods at one end and exporting at the same time, unlike some production enterprises, they can slow down the profit impact caused by exchange rate changes from upstream cotton and textile links.

He said that at present, more than 90% of the company's orders are settled in US dollars, and the impact of exchange rate changes on them can be imagined.

Although many of the company's export business is aimed at countries such as Australian dollar, Canadian dollar and euro currency, on the one hand, most customers are more accustomed to using the US dollar as the world currency. On the other hand, other currencies also have the problem of exchange rate fluctuation, so they mainly use us dollar settlement.

"Now we can only minimize losses by locking the exchange rate, or try to settle in other currencies."

He said.

The so-called "lock in rate" refers to the enterprise when signing the bill to inform the bank to carry out the exchange rate lock, in the actual settlement of the goods at the time of the lock in the exchange rate, to avoid the exchange rate fluctuations to the enterprise's losses.

Corporate profits have shrunk dramatically

But how much is the impact of exchange rate changes on the textile export industry?

According to the statistical report of Hebei textile and clothing association in July, the increase of RMB to us dollar exchange rate will cause 1% to 2% to 6% of Hebei textile export profits.

To the enterprise, another person from another textile import and export company in the province told reporters that the exchange rate of RMB against the US dollar was about 1:6.7 during the same period last year. Now it has become 1:6.3, which is equivalent to 1 yuan, which is "0.3 yuan to 0.4 yuan" cheaper.

And the company's 70% to 80% orders are US dollar settlement, "it's too much!"

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"For example, if the profit margin at that time was calculated by 10%, then the change in the exchange rate of light would eliminate 3% to 4% of that."

She explained that, along with the rising fabric prices and higher wages of workers, a considerable portion of their profits had been eliminated, and the good profit margins had shrunk.

The woman said that at present, the upstream and downstream businesses are squeezing profits from textile exporters, and they survive like cracks. Most of their counterparts in the province know how to survive.

The reporter learned from the Hebei textile and apparel industry association that Hebei Province, as a major province of textile and clothing export, did import a lot of import and export enterprises.

There are many who dare not answer.

It is understood that this situation has made many textile exporters fall into the embarrassment of "one dare not answer".

The above-mentioned lady said that such a low profit state reduced the risk resisting ability of enterprises.

Sometimes, as long as the exchange rate changes slightly, an order may be hard for an enterprise, and it will not make much money or even lose money.

"This year, I did encounter a lot of situations where monads dare not answer them," she sighed.

It is understood that the current downturn in textile import and export enterprises, in addition to exchange rate changes, domestic inflation in the context of rising costs is also a major factor.

In recent years, the cost of cotton, pportation and labor in the domestic market has been rising, while the price of foreign market orders has not increased correspondingly.

The fundamental reason is that textile exports are in a predicament because of the fluctuation of RMB exchange rate and rising costs. Once again, the problem of low added value and low profit margins of textiles in Hebei is exposed again.

Insiders said that although Hebei is a major textile export province, it can not be regarded as a strong textile province. Its exports are mainly primary products such as towels, blankets, clothing and so on.

Speeding up the adjustment of the export structure of textile products, phasing out primary products and producing more high-grade products with high profit margins will be the long-term solution for the provincial textile enterprises to avoid exchange rate risks.