The foreign trade prosperity index in October closed at 733.49 points, down 3.96% from the previous month, down 0.55% from the beginning of the year, and up 2.69% from the same period last year; the foreign trade price index closed at 155.40 points, down 5.35% from the previous month, and up 1.62% from the beginning of the year. A year-on-year increase of 5.71%; the foreign trade confidence index closed at 1202.33 points, a month-on-month decrease of 2.03%.
With the continued fermentation and escalation of the Sino-US trade war in October, it has put tremendous pressure on textile and apparel exports. Foreign relief measures and trade barriers against China’s textile and apparel trade have been increasing day by day, and the external situation of textile and apparel trade has become increasingly severe. Affected by the Sino-US trade friction, textile and apparel exports have been hindered, and the market has become more pessimistic. The international textile market has become cold during the “Silver Ten” period. As a result, the 20181025 foreign trade prosperity index fell month-on-month, and the foreign trade price index fell month-on-month.
The foreign trade prosperity index fell month-on-month
In October, the prosperity index of foreign trade textile enterprises in Keqiao District, Shaoxing City fell month-on-month. Due to the decline in overseas buyers’ stocking and purchasing, the number of new orders and export goods volume of foreign trade companies fell month-on-month. Among them: the foreign trade prosperity index of chemical fiber filament fabrics fell by 12.23% month-on-month, and the foreign trade prosperity index of curtains and draperies fell by 8.86% month-on-month, driving the foreign trade prosperity index to decline month-on-month.
1. Textiles and clothing have been affected by the trade war. As the trade friction between China and the United States continues to escalate, some textile and apparel products have been affected by the trade war, and exchange rate fluctuations will become the norm in the new era, posing challenges to the cost accounting and profit realization of enterprises’ export orders. Under the Sino-US trade war, Chinese textile and garment enterprises will face big challenges in exporting.
2. Clothing exports have become the focus of the impact. Among the textile and clothing products exported by my country, about 30% are textile products and 70% are ready-made garments or garment processing products. The purpose of fighting is to hit the enemy where it hurts the most. Therefore, clothing exports are more likely to be the focus of the impact. This is also true. The European, American and Japanese markets all experienced year-on-year declines. Currently, including labor costs plus transportation and import and export fees, the production cost of jeans in Turkey is 3% lower than that in China, and the cost of production in Mexico is 12% lower than that in China. It is precisely because of changes in this factor that clothing production is flowing to Europe. A report released by McKinsey also shows that “for some low-cost garments, it is more important to produce them nearby in Europe or North America.” However, the great policy of “One Belt, One Road” is a strong backing for many textile companies to continue to fight.
3. Clothing orders have obviously shifted to Southeast Asian countries. Americans are not very willing to do the work of making clothes. Vietnam is most likely to benefit. Vietnam is the second largest textile and clothing import market for the United States. It is crowded and cheap. Most of China’s orders have been taken away by it. Sino-US trade friction continues, and many parties are on the verge of death. However, under this hail of bullets, Bangladesh’s garment industry is becoming a “winner” of this trade war as US retailers place more orders, but the situation in sectors such as jute and leather goods has not yet improved. . Local garment manufacturers in Bangladesh admit they are receiving more work orders from the United States. What makes Southeast Asia a major apparel production base is undoubtedly the region’s cheap labor force. Although China remains by far the world’s largest exporter of manufactured goods, some factory owners are beginning to shift production to other developing countries such as Bangladesh, Cambodia, and Vietnam. The move is aimed at seeking lower wages and hedging against the political and economic risks of dependence on one country.
The prices of mass products fell month-on-month, and the foreign trade price index fell month-on-month
The foreign trade price index in October showed a month-on-month downward trend. Among them: the foreign trade price index of chemical fiber filament fabrics fell by 5.34% month-on-month; the foreign trade price index of knitted and crocheted items fell by 11.22% month-on-month; driving the overall foreign trade price index to fall month-on-month.
1. Economic downturn, falling oil prices and other factors have affected the entire textile, clothing and chemical fiber industry. International oil prices continued to fall, with U.S. and Burundi oil prices falling sharply. The recent weakening of the global economy has also reduced market demand expectations to a certain extent, thereby putting pressure on oil prices. As a result, the chemical fiber market has weakened significantly. The prices of polyester filament and polyester staple fiber have dropped. The export prices of chemical fiber filament fabrics and knitted crocheted fabrics using chemical fiber as the main raw materials have dropped, causing the foreign trade price index to fall month-on-month.
2. Low-price competition in Southeast Asia has intensified and profit margins have been compressed. Affected by the high labor costs in the domestic textile industry and low-price competition in Southeast Asia, my country’s textile manufacturing companies have suffered serious loss of orders. Some companies’ overseas orders have been competed by Southeast Asia. Many small and medium-sized enterprises are facing increased inventory and order quantities. problems of reduction and falling prices. The loss of orders means the loss of potential profits, which is a pity for my country’s textile manufacturing enterprises that are in the period of transformation and upgrading. In order to save orders, enable companies to win international market share, and maintain normal operations, some small and medium-sized enterprises without product advantages do not hesitate to further compress their profit margins when accepting orders. As a result, the foreign trade price index fell month-on-month.
3. Prices of mass products fell month-on-month. Textiles have always been an important economic pillar of our country and have been warmly welcomed in domestic and overseas markets. However, the quality of products produced with ordinary production techniques and cheap raw and auxiliary materials varies.Incompleteness and lack of functions are also the main reasons for the decline in export prices. Limited by the lack of technical talents and weak capital costs, most manufacturing companies cannot keep up with the leading domestic and foreign standards when producing products. Most of the textiles produced have low technical content and few functions. , low quality and other issues, we can only target the mid- to low-end markets, which are easily constrained by foreign economic conditions and standard terms. At present, Keqiao District’s foreign trade growth is still under great downward pressure, with insufficient foreign trade orders for mass products and falling prices month-on-month.
Forecast of the next foreign trade index
Regarding the export situation in November 2018, it is expected that textile and apparel exports will show a slight rebound. The international market demand continues to be sluggish, and the Sino-US trade friction will undoubtedly be a big challenge to the textile and apparel industry, which will prevent the growth rate of textile and apparel exports from significantly increasing. The fashion trends in the textile and apparel industry are getting faster and faster. Small batches, multiple varieties, frequent product changes in seasons, and increasingly shorter sales cycles require the production and circulation of textile and apparel to complete corresponding orders in a relatively short period of time. It will be a new attempt for foreign trade companies to explore emerging markets and transform cross-border e-commerce. While the European and American markets are sluggish, many textile companies are paying more attention to the market in the “Belt and Road” region. The sales method of cross-border e-commerce channels is a severe challenge to the textile and apparel supply chain. Faced with the improving situation of textile and apparel exports in countries along the “One Belt and One Road”, export textile companies are actively using Internet technology to reform the accumulated shortcomings of exports. They not only need technological innovation, but also deepen their cultural heritage, enhance brand value, and optimize the layout of the industrial chain structure. As environmental protection requirements increase, the competitive landscape optimizes, and upstream costs increase, large-scale enterprises are actively transforming and upgrading, upgrading to technological content, productivity, and higher levels to enhance their competitiveness. Shaoxing Keqiao Textile Enterprises has created an “Internet + foreign trade” platform to jointly build a foreign trade ecosystem, and textile trade will also usher in new development opportunities.
Title: October Foreign Trade Index: Weak international market demand, foreign trade marketing prices and volumes fell
