Affected by the conflict between Russia and Ukraine, the shortage of energy supply and the economic recession, the euro depreciated rapidly, and the exchange rate against the US dollar fell below the 1:1 mark, the lowest level in nearly 20 years.
Under the combined influence of factors such as the instability and uncertainty of shipping prices and logistics, the weakness of European and American consumer markets, and the diversion of orders from Southeast Asia and other countries, the order volume of many foreign trade enterprises in China has decreased significantly.
In the field of clothing, from the performance warning of the first half of the year released by Listed Companies in the brand clothing industry, the clothing industry seems to have handed over the worst report card.
Insiders said that everyone knew that the performance would be bad, but such a decline was still unexpected, which was expected to be about 50%.
In the textile field, since the implementation of the United States’ policy of banning Xinjiang cotton, the pressure on foreign trade export enterprises has been greater.
Downstream orders decreased significantly, long and large foreign trade orders gradually disappeared, and customers ordered more short and small orders.
At present, the overall starting rate of looms in Jiangsu and Zhejiang is less than 50%, which is the lowest in the past five years.
A furniture enterprise in Dongguan said that at present, its foreign trade business is basically settled in US dollars.
Now the depreciation of the euro against the US dollar means that customers have to pay more for each order, which is naturally more cautious, which is detrimental to export enterprises.
The consumer market is weak, and customers’ ability to place orders is not strong. On the whole, orders have been reduced a little since May and June.
A foreign trade clothing factory said that foreign customers canceled Christmas orders in October, with a value of more than 100million yuan.
This order accounts for 40% of the total business volume of boss Chang, which he finally grabbed from Indian manufacturers in 2017, but now it has been ruthlessly cancelled.
A hardware foreign trade enterprise said that the off-season in July and August also had a certain impact on orders. Some German customers recently informed domestic enterprises that the shipment of this year’s goods will be postponed to the beginning of next year, which will also have an impact on this year’s revenue.
A garment import and export enterprise in Anhui Province said that most factories had basically no orders by September this year.
At this time last year, they could be arranged until at least November, and then they could continue to have orders. This year, they entered the “idle” state almost two or three months earlier than in previous years.
Compared with the summer off-season in previous years, this summer is more “unfriendly” to foreign trade enterprises.
In addition to the insufficient consumption in the European and American markets, the instability of shipping caused by the turbulence of the international situation has also affected the orders and profits of foreign trade enterprises.
In fact, since the beginning of this year, affected by the repeated epidemic, the conflict between Russia and Ukraine and the energy shortage, the consumption in the European market has been seriously insufficient.
Since the beginning of the year, a number of Dongguan foreign trade enterprises’ orders to Europe have begun to decline.
What is more terrifying is that many products involved in foreign trade industries have strong seasonality and “shelf life”.
Orders need to be placed in advance for production. Sudden situations such as epidemic, declining demand, and changes in popularity in a season will have an impact on the operation of subsequent quarters.
Once the style “expires”, the value of the commodity is seriously impaired, and the price can’t even be guaranteed at a 20% discount, which is also the reason why many foreign traders are not optimistic about the situation of the industry in the second half of the year.
Post time: 07-27-2022