As shown in Figure 1 and Figure 2, the foreign trade prosperity index closed at 1252.16 points in June 2014, down 4.52% month-on-month and 10.44% year-on-year; the foreign trade price index closed at 121.92 points, down 4.97% month-on-month and 4.57% year-on-year. %; the foreign trade confidence index closed at 1103.00 points, down 1.66% from the previous month.
Intensifying pressure and weakening foreign trade boom
The comprehensive competitiveness of product exports is insufficient. Pressures affecting the development of the textile industry still exist. Export enterprises in Keqiao District, Shaoxing City still mainly focus on mid- to low-end products, with low industry entry barriers and fierce market competition. At the same time, labor costs and capital costs are increasing year by year, resulting in increasing export risks for many small, medium and micro enterprises. The lack of comprehensive competitiveness of product exports affects the foreign trade boom to a certain extent.
Raw materials have become a constraint restricting the sustainable development of the textile industry. The growth rate of enterprises above designated size continues to slow down, and the pressure for industry development is increasing. Raw materials were originally the basis for the survival of the textile industry, but now they have become a constraint restricting the sustainable development of the industry. On the one hand, the high price difference between domestic and foreign cotton has increased the production costs of enterprises. On the other hand, the supply of natural fibers to replace cotton is insufficient, and chemical fiber technology needs to be improved. The pain of cotton lies in the industry. Although cotton only accounts for 20% of the entire textile raw materials, the price of cotton as a basic raw material not only directly determines the production costs and competitiveness of textile and garment enterprises, but also affects natural fibers and chemical fibers. and other supply and demand conditions for raw materials. International cotton prices fluctuate based on market supply and demand, while domestic cotton prices are supported by temporary storage prices and import quotas. Affected by insufficient demand in the international market and expectations of a bumper harvest, cotton prices in the international market have shown a downward trend, and the price difference with domestic cotton has further widened, weakening the international competitiveness of my country’s textile industry. The price difference between domestic and foreign cotton prices is within 2,000 yuan per ton, and the textile industry can hedge through technological progress and variety development. When the price difference widens to 4,000 yuan per ton or more, any technological progress and talent reserves will pale in comparison.
Enterprises still have insufficient orders. In June this year, the local textile industry has not yet ushered in the peak season, and some companies even still have problems with insufficient orders and small sales. In fact, due to market confusion caused by declining domestic sales and weak external demand, the textile industry has not yet experienced the expected recovery this year, and the benefits of many companies have even been greatly reduced. A few days ago, the person in charge of a local textile company revealed that June is the peak production season for the textile industry, but the company’s orders are still insufficient, and the factory’s production capacity has been reduced compared with the previous month.
Insufficient foreign demand. Foreign trade enterprises in Keqiao District, Shaoxing City still need to further consolidate and improve their vitality in foreign trade operations. The decline in the foreign trade prosperity index indicates that demand expansion is slower than production expansion. This is also a major reason why the foreign trade confidence index fell by 1.66% month-on-month in this period. The demand for clothing fabrics and home textile products has declined month-on-month. Among them, the foreign trade prosperity index of cotton and its blended fabrics, chemical fiber filament fabrics, chemical staple fiber fabrics, embroidery, daily home textile fabrics, and knitted and crocheted products has declined in varying degrees. Among them: cotton and its blended fabrics fell by 2.31% month-on-month, chemical fiber filament fabrics fell by 11.91% month-on-month, and daily home textile fabrics fell by 11.64% month-on-month, which directly affected the decline in the overall foreign trade prosperity.
Intensified international competition suppresses prices
Demand shrinks and prices fall. Many foreign trade companies have insufficient orders from Europe and the United States, and raw materials have become a constraint restricting the sustainable development of the textile industry. Prices have been falling, causing the price index of export products to decline in this period. Some textile export and foreign trade companies promoted their products due to surplus, which also caused a corresponding drop in prices. For example, in this period, the price index of cotton and its blended fabrics, chemical fiber filament fabrics, chemical staple fiber fabrics, and embroidery products has dropped in varying degrees due to the reduction in foreign trade orders. Among them, cotton and its blended fabrics fell by 6.54% month-on-month, and chemical fiber filament fabrics fell by 9.01% month-on-month, causing the general foreign trade price index to stop rising and fall.
External shocks compress profits. Although some companies in Keqiao District, Shaoxing City have responded by locking exchange rates, hedging financial instruments, and negotiating prices one by one, many export companies still face high-cost difficulties. In addition, major textile manufacturing countries in Southeast Asia have taken advantage of low costs. To absorb orders, the price competitive advantages of emerging textile and apparel manufacturing countries such as neighboring Vietnam and Bangladesh have seriously impacted my country’s textile and apparel exports. Under the squeeze of low-cost labor force in Southeast Asia and other countries, some textile and garment enterprises in Keqiao District, Shaoxing City and Textile City Textile Company’s mass products continue to accept some foreign orders at reduced prices. The profit margins of mass products are still compressed, and the corresponding extent has caused this month The foreign trade price index fell month-on-month.
Lack of say affects prices. This month, international market demand has declined, and most small, medium and micro enterprises in Keqiao District, Shaoxing City still lack the right to say prices due to mass products. In order to seek foreign orders, foreign trade companies still have to “fight costs and prices”, and the initiative on prices is still in the hands of foreign businessmen to a certain extent. Due to competitive pressure, some foreign trade companies have repeatedly reduced their prices to seek orders, which has relatively affected the price trend of this period.
Export companies mostly focus on short- and medium-term orders. Due to factors such as high labor costs,Affected by the epidemic, long-term foreign trade orders have declined, and textile export companies mostly focus on short- and medium-term orders. These short- and medium-term orders directly reduce the export profits of enterprises. In order to increase product prices, textile export enterprises began to focus on brands and move towards the high-end market. The current gross profit margin in the textile industry is not high. In the downturn, if companies choose to increase prices, they are afraid of losing market share. If they do not increase prices, companies will face losses. This is really a very troublesome choice.
Forecast of the overall prosperity index for the next period
Regarding the export situation in July this year, industry analysts believe that although the global economic recovery this year has not been as strong as expected and the overall performance of the international market is stable and weak, the export environment of China’s textile industry is basically good. From the perspective of development trends, as the positive impact of economic recovery on the consumer market gradually deepens, the export growth rate of China’s textile industry is expected to show a steady rebound.
However, issues such as resources, environment, and labor costs are still prominent, which will affect the sustainable development of China’s textile industry.
