How To Deal With The Situation Of The Decline Of Starting Rate For Textile Enterprises With The Reduction Of Foreign Trade Orders

On July 17, the reporter continued his trip to Shandong to investigate the production and operation of downstream textile enterprises. On this day, domestic cotton prices continued to fall sharply, and the textile industry continued to bear pressure. Since the implementation of the US cotton ban policy in Xinjiang, the pressure on foreign trade export enterprises has been even greater. What is the actual situation?

Today, I came to an enterprise specializing in foreign trade and export. Its scale is large and its product quality is excellent. I mainly use bedding. I remember that I visited once a few years ago. At that time, the workshop was busy with production. When it was time to eat, I saw many employees rushing to the canteen in the park. It was also common for enterprises to work overtime on weekends. We can't say how high the profit of the products is, But production never stops.

There's less noise in the park. It's a bit more desolate. In the past two weeks, the cotton circle of friends had been discussing the topic of US tariff reduction. However, through field visits, it was found that the impact of tariff reduction on enterprises was not as positive as you imagined. The head of the purchasing department of the enterprise said that the tariff normally imposed by the United States on Chinese exports was 9.6%, and then increased by 7.5%. Even if 7.5% is cancelled, it will be higher than that of Vietnam and other countries exporting American goods, and the positive impact of the tariff cancellation is limited.

It is understood that 70% of the company's products are used for export and 30% of its products are for domestic sales. The starting rate of production lines for export products is reduced to about 90%, while that for domestic sales is reduced to 70%. The situation of domestic sales is worse than that of export. The reason why the production line has not been fully opened is that after the fall of cotton price, downstream orders have decreased significantly, long and large foreign trade orders have gradually disappeared, and customers have ordered more short orders and small orders. At present, the whole industry is in a state of panic, even more than the financial crisis in 2008. Due to the formal implementation of the ban on Xinjiang cotton in the United States, enterprises have no longer dared to use Xinjiang. The original effective and flexible measures have been adopted by enterprises no longer by chance, because once found, the products will be destroyed, which is a common problem faced by domestic export-oriented enterprises.

At present, the price of foreign cotton is higher than that of Xinjiang cotton by 2000 yuan / ton. The use of foreign cotton means that the production cost of the enterprise is significantly increased. In addition, the tariff imposed on the export of products leads to the final settlement. The price of one ton of products is significantly higher than that of India, Vietnam and other countries. The competitiveness is weakened, and the orders are reduced accordingly.

Today, the domestic and foreign cotton prices have fallen sharply. According to the cotton and yarn price comparison, the product seems to have a profit, but the actual situation is not the case. According to the company, the cotton price has fallen rapidly this time. The average cost of cotton inventory of many enterprises is about 20000 yuan / ton. Although the enterprises can make profits according to the real-time price settlement, if the inventory cost is included, the enterprise still loses money. It will take about two months to digest this wave of inventory, and the obvious shortage of orders is more troubling to the enterprises, Now we can only reduce production capacity and reduce inventory. For the strategy of export to domestic sales, enterprises think it is unrealistic at present, because domestic consumption can not accommodate such large capacity. Now the enterprise can do is to reduce inventory and production costs, continue to reduce the cost of various expenses, waiting for the rainy day.

However, there is no need to worry too much about the resilience of the enterprise. For enterprises with low inventory of raw materials, the short-term problem is not big, because the high profits of the first two years or accumulated a lot of funds for enterprises. For the enterprises with excessive inventory of raw materials and products, the pressure is relatively large.