Yesterday (August 11), the central parity rate of the US dollar against the RMB was 6.2298. The RMB depreciated by 1.86% compared with the central parity rate of the previous trading day. The central bank opened the RMB depreciation window. This change has an impact on the textile and apparel industry, which is relatively highly dependent on exports. It is undoubtedly a good thing, directly increasing export profit margins, indirectly reducing production costs, and boosting industry export confidence. The stock price limit of major export-oriented listed textile companies is also a major evidence.
1. Increased profit margin
According to customs statistics, in the first half of 2015, my country exported US$40.85 billion in cotton textiles and clothing and imported US$5.4 billion, with an average monthly amount of US$6.81 billion and US$900 million respectively. Calculated based on the RMB depreciation of 1.86%, theoretically If we estimate that monthly net export profits will increase by US$110 million in the later period, then from September to December, if the RMB remains stable, it will increase by US$440 million, increasing profit margins.
For cotton yarn, in the first half of 2015, the export volume was 121,300 tons, with a value of US$622 million, and the import volume was 1,118,400 tons, with a value of US$3.053 billion. According to the same calculation method as above, the monthly deficit can be reduced by US$7.53 million.
2. Indirectly reduce export costs and improve the international competitiveness of local cotton products
Take my country’s exported cotton yarn as an example. Based on the 1.86% depreciation rate, the price of exported cotton yarn can be reduced by about 590 yuan/ton. This will increase the bargaining power of export products, improve international competitiveness, and help restore export market share.
Theoretically, the cost of imported carded C32S will increase by about 300 yuan/ton. Yesterday, traders have raised their quotations for imported yarn. However, the actual transaction price is difficult to increase. Price reductions may be necessary. As costs rise, losses are inevitable. Assuming that the price of domestic yarn remains unchanged, the price difference between domestic and foreign cotton yarn will be reduced by 300 yuan/ton. In fact, the price of domestic yarn may be appropriately increased based on this space to strive for a certain profit margin. All profits will not be lost. transmitted to downstream.
3. Domestic and foreign yarn price competition, imported yarn re-finds the price balance point
my country’s imported yarn mainly comes from India, Pakistan, Vietnam and other countries. The competitive advantages of cotton yarn in these countries come from low-priced raw materials, labor and energy and electricity costs. The imported yarn pricing model mainly comes from two aspects. One is production. The transformation of domestic surplus production capacity, on the other hand, is the price of domestic cotton yarn. That is to say, the price difference between internal and external yarns remains at a certain level, currently around 1,000 yuan per ton. For foreign production companies, the US dollar quotations will not be adjusted for the time being. However, as China’s consumption declines and sales pressure increases, foreign companies will also lower their US dollar quotations. To ensure a stable price difference, imported yarn will usher in another price equilibrium point. What the price of this equilibrium point is and when it will occur will depend on the existing domestic inventory of imported yarn and downstream consumption capacity.
In the second half of the year, the downward pressure on my country’s economy will still be great. While domestic consumption is also weak, relying on manufacturing to increase net exports may be an important option. In order to stimulate exports, the RMB has passively depreciated. There are also relevant reports pointing out that the RMB exchange rate may fluctuate in the future. If the range is expanded from the current 2% to 3%, this will greatly stimulate the export of my country’s textile and apparel industry and boost industry confidence. How much will the huge depreciation of the RMB affect my country’s cotton textile industry?
How much will the huge depreciation of the RMB affect my country’s cotton textile industry?
Yesterday (August 11), the central parity rate of the US dollar against the RMB was 6.2298. The RMB depreciated by 1.86% compared with the central parity rate of the previous trading day. The central bank opene…
This article is from the Internet, does not represent Composite Fabric,bonded Fabric,Lamination Fabric position, reproduced please specify the source.https://www.yjtextile.com/archives/11120