The face of raw material prices, textile companies favor short and medium orders

Despite many orders and rising prices, due to concerns about the changes in exchange rates and raw material prices, textile companies generally avoid long-term single-avoidance approaches. This is the fifth phase of the 109th Canton Fair on May 5th. In the case of orders signed at the fair, 90% of the orders were short and medium-sized orders, and only 10% were orders for more than 6 months.

It is understood that after the economic crisis in 2008, the short and medium-term orders in the textile industry began to dominate, but the reasons for this year have changed. The main reasons for the short-term and mid-term orders in the first two years were mainly due to the buyers being cautious about the market outlook, mainly relying on staged restocking, but were unwilling to make long-term orders. This year, the situation is completely different. Exporters are often exposed to changes in exchange rates and raw material prices. In general, it is difficult to sign long-term orders or even single orders, and the profits of export companies have declined significantly. According to the data of the Ministry of Commerce, the average profit rate of Chinese export enterprises in 2010 was 1.47%. From January to February of this year, it further decreased to 1.44%.

Raw material price increase is the biggest problem faced by textile companies. The annual increase in domestic cotton prices from 2005 to 2010 is 5%, 3%, -5%, -5%, 40% and 86%, respectively. In addition, recruitment is difficult to cause underemployment. As well as the appreciation of ***, the export cost of the industry increased by 10% to 20%. In order to shift the cost pressures, textile companies had to increase their quotations. At the China Fair held in March this year, the orders of textile companies generally increased by 15% to 20%. %. The same is true for the increase in quotes at the Canton Fair.

In the first quarter of this year, China's textile and apparel exports totaled 48.627 billion U.S. dollars, a year-on-year increase of 23.96%. The monthly export value in February exceeded US$20 billion for the second time in history, and reached a record high, continuing the rapid growth momentum in 2010. In 2010, the export value increased by 23%.

However, the reasons behind the increase in export value this year have quietly changed. Wang Qiang, chief editor of the First Textile Network, said that as far as 2011 is concerned, the “protagonist” that has driven the growth of China’s textile and apparel exports as a whole has changed from a quantitative increase to an increase in export prices, which also shows that export companies are facing increasing costs. Pass pressure.

Wang Qianjin believes that with the rise of domestic factor costs, the era of China's textile export products opening up markets at lower prices has ended. Compared with the rapid increase in the prices of human and raw materials before the end of 2007 and the limited increase in export prices, this year's situation is likely to indicate that Chinese companies have faced cost increases, their ability to tap potential internally has been exhausted, and they will enter an export product price and cost price relationship in the future. The process of improvement.