Accelerated Depreciation Of The Renminbi And Impact On The Import Cotton Market

Recently, the renminbi accelerated its depreciation and earned enough eyeballs for cotton buyers and traders, adding another layer of frost to the already sluggish cotton import momentum in China.

This round

For those buyers and traders who did not lock in the exchange rate risk in advance, the cost of imports increased significantly.

Since December 16, 2015

Since the announcement of the increase in interest rates, the RMB exchange rate has been shaky. The RMB exchange rate in Beijing in January 7th was 6.5646, an increase of 0.9% compared with the beginning of this month, and the offshore RMB exchange rate fell below 6.7.

Traders said that their business

In the expectation of depreciation, we have already locked up the remittance. In order to prevent depreciation, we should not open a forward letter of credit, choose a spot payment or D/P payment method, and lock the exchange rate around 6.4.

Depreciation has no effect on cotton that is to be sold in stock, but for late orders, the company is quite cautious.

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In terms of textile exports, according to the latest statistics of the General Administration of Customs of China, in November 2015, the export volume of textiles and clothing was 21 billion 982 million US dollars, down 7.07%, down 9.70% from the same period last year.

Among them, exports of textiles (including textile yarns, fabrics and articles) amounted to US $8 billion 668 million, down 9.20% compared to the same period last year. Exports of garments (including garments and accessories) were US $13 billion 314 million, down 10.03% from the same period last year.

In 2015, the total export volume of textiles and clothing was 257 billion 28 million US dollars in 1-11 months, with a total decrease of 5.77%.

As for the production and sale of gauze, the market of yarn and grey fabric sales continued to be weak in November.

Textile mills have more price promotions, sales increased by 0.6 percentage points compared with October, and sales of grey fabrics decreased by about 2.01 percentage points.

Yarn inventory for 17 days, an increase of 1.29 days from last month, grey cloth inventory 21.2 days, an increase of 0.5 days from last month.

In terms of inventory of domestic textile enterprises, in November, raw material market resources were relatively abundant, and the stock of textile enterprises increased.

The survey shows that textile enterprises in the month increased 29 thousand and 600 tons of cotton stocks in the same period last month.

Of the surveyed enterprises, 34% increased the stock of cotton in the warehouse, and 30% reduced the stock of cotton in the warehouse.

At the end of the month, the end of the replenishment of textile enterprises is coming to an end. Because most enterprises are still short of confidence in the market outlook and remain relatively low disposable cotton stocks, about 70.49% of the surveyed enterprises will maintain their existing stock of raw materials in December.

The total export volume of textile products in China continued to decrease slightly, the performance of gauze production and sales was weak, and the cotton inventory of textile enterprises was low, and the purchasing intention was weak, but the textile industry was still in a difficult period.