Overseas Orders "Brake", Yarn Export Cold Business How To Break?

With the continuous spread of the new crown pneumonia epidemic in the world, many countries and regions have declared a state of emergency. For the textile industry, when domestic demand is just beginning to stabilise, the external demand is breaking off the cliff type downtrend. The most direct manifestation is that the world-famous brands have announced the shutdown.

Today, with the close connection of the world's economic and trade, the "suspension key" of textile and apparel terminal brands in Europe and the United States has made the domestic textile and garment export enterprises inevitably suffer from the withdrawal of overseas customers, facing even more severe export situation. Even people in the foreign trade circle described the "war epidemic" in China, half in the domestic market and half in the foreign trade. Play the whole game. However, not only downstream clothing, from the perspective of industrial chain, textile enterprises in the middle and lower reaches are facing the crisis of overseas orders being canceled, and spinning enterprises are no exception. What is the current export situation of spinning enterprises? What measures will be taken to deal with the cancellation of export orders?

Cold export
European and American customers cancel orders

Affected by the epidemic, the domestic textile enterprises have a much slower pace of return to work than in previous years. Many textile enterprises have just solved the problem of personnel placement and encountered overseas orders declining.

"In the middle of March, a number of customers cancelled orders after being affected by foreign epidemic. And those large customers decide to postpone shipment. The impact and impact of this on foreign trade companies is not small. " The owner of a spinning enterprise with the complete industrial chain of spinning to clothing is rather helpless.

"At present, the domestic factories have basically resumed production. Because of the delay in the resumption of work, enterprises are working overtime for orders, and are busy shipping. With the continuous spread of the epidemic in the world, a large number of foreign trade orders have been canceled. The most troublesome thing is that the orders that have been started are cancelled halfway, because enterprises generally charge only about 30% of the customer's deposit, which is far from the cost line, and the loss is relatively large. A lot of enterprises say that on the one hand, they are no longer easy to pick up orders, and the order is cancelled again. The other side, after receiving a small number of new orders, will strive to implement them as soon as possible and avoid any variables in the middle.

"Because of the epidemic situation, many European clothing stores are closed, at least two or three months will be the case, and stores even open, business is not good, so all orders suspended, some new orders may be directly canceled. 80% of the European and American customers have this situation. The head of a clothing trade company said that most European and American customers are suspending or cancelling orders in large numbers.

According to "China textile daily" reporter, compared with the focus on export of garment foreign trade enterprises and fabric enterprises, the spinning enterprises are facing relatively fewer rebate orders, most of them are European and American customers. For the textile enterprises which export to non European and American countries or regions, the cancellation of orders is relatively rare, but most of them are worried about the global spread of the epidemic. In the rush to make orders, we hope to get an early delivery and get a refund.

Do well in internal strength
Adjusting the ratio of domestic and foreign trade

In view of the recent "overseas withdrawal", many spinning enterprises involved in the export of products indicated that they would appropriately adjust the proportion of domestic and foreign trade to slow down the impact of the epidemic.

A spinning company chief who made orders in Italy and Korea said: "although we haven't received the notice of cancelling the order this year, the order volume in the first quarter is much lower than that of last year. Next, we will dig the domestic market well, and now the domestic epidemic is basically controlled, so it may be a good opportunity." Similarly, a company that exports colored spun yarn also revealed: "orders are reduced by 20% compared with last year. At present, orders can be achieved at the end of April. Next, we will consider a little more domestic trade, but domestic trade also has disadvantages. Customers' repayment is longer than that of foreign trade. Most of them are in 3 months or even longer. Therefore, domestic trade is not good. This year's situation tests the viability of enterprises."

"Next we will consider the internal adjustment of the import and export ratio." Exporters of cotton yarn in Xinxiang, Henan, said they expected to reduce their orders by about 30% in the first quarter of this year. In the short term, the company will consider shifting the focus of sales to domestic or lighter areas.

In the absence of effective control of the epidemic situation abroad, it is a good policy to shift the focus of business to China. Industry experts believe that in the current situation of effectively curbing the spread of the epidemic in China, export enterprises may wish to give due consideration to the domestic market and, while sticking to their original positions, properly develop domestic customers.

But the industry experts also remind spinning enterprises that nowadays the domestic market is already too few and the industry is very competitive. Under such circumstances, spinning enterprises should pay more attention to their product quality, intensify their innovation, research and develop differentiated and functional yarns, so as to have enough strength to win in competition.

"The epidemic will definitely affect the quantity of orders. We will develop more products according to the change of consumption structure, provide unique quality services, meet all kinds of needs, and retain customers." A company responsible for exporting yarn to Japan and South Korea has said that it has not yet received notice of cancellation. The company is actively developing new products while tightening up orders.

Avoiding risks
Stabilize the Southeast Asian market

Fermentation abroad has undoubtedly increased the instability of China's imports and exports and the global industrial chain. "The current overseas epidemic has not yet passed the peak period, and foreign trade enterprises are facing the double impact of the supply chain and the shrinking demand." Expert analysis.

In the first half of March, a large number of clothing stores in Europe and the United States ceased to be open to the outside world. Almost all clothing companies, clothing department stores and clothing electric business companies' share prices were cut short. The impact of global epidemic prevention and control on the total market demand has come into being.

At present, the spread of the epidemic in Southeast Asian countries is less than that in the European and American countries. Southeast Asian countries are heavily dependent on China's supply of textile raw materials, and the outbreak affected the supply of raw materials once. With the gradual recovery of Chinese enterprises, it is particularly important to protect and stabilize the market share in Southeast Asia.

Experts say that while adhering to their original positions, the spinning enterprises can appropriately develop domestic trade customers, or transfer the focus of foreign trade sales to areas with less epidemic or no epidemic situation, so as to open up new overseas markets, so that enterprises will not be difficult to continue because of no orders.

To avoid risks and expand the market is the reason why many spinning enterprises invest overseas. In fact, many spinning enterprises do the same. For example, Tianhong Textile Group Limited, which has just announced its annual report in 2019, said that Tianhong textile will continue to adhere to the direction of internationalization and vertical integration of industrial chain, build yarn production base outside China, directly face overseas markets, and continue to build textile dyeing three and one in Vietnam and Nicaragua. The fabric production base, on the one hand, effectively mitigates or evade the impact of Sino US trade friction. On the other hand, it promotes the overall profit margin and enhances the stability of profits through the vertical integration of fabrics and even the production of clothing, and reduces the impact of price fluctuations of raw materials.