The war between Russia and Ukraine has continued since February 24, but there is still no result and negotiations are continuing. After the war between Russia and Ukraine began, the global capital market fell in response, and the following few trading days were also thrilling.
In fact, the war between Russia and Ukraine not only affected the capital market, but also the manufacturing market. The textile industry was naturally unable to escape. It is understood that some foreign trade orders exported to Ukraine have been affected recently. According to the latest news, in terms of ports, the Ukrainian government has closed the Port of Odessa on February 24, 2022. This also means that goods cannot be exported to Ukraine, causing orders to be stagnant. In addition, due to the impact of the war, Ukraine has also stopped some domestic orders, especially those that are currently in production, which has a great impact on enterprises.
A foreign trade company that exports 70% of its orders to Ukraine said: “After the Spring Festival, it received more than 200,000 meters of Ukrainian orders, many of which have been produced in dyeing factories. Since the start of the Russia-Ukraine war, it has received notices from customers to stop. We will resume production and wait for follow-up notifications. It is also difficult to contact customers now, and whether we can continue to cooperate in the future is worrying.”
Ukraine is a traditional textile market and a fabric distribution center in Central and Eastern Europe. Ukraine has the largest physical fabric market in Eastern Europe. Ukraine’s fabrics mainly come from China and Turkey. In 2019, 2020, and 2021, China’s textile and clothing exports to Ukraine were US$680, 660, and 760 million respectively, accounting for approximately 35-40% of Ukraine’s imports. China is Ukraine’s largest exporter. Source of textile and clothing imports.
The war between Russia and Ukraine has far-reaching consequences, affecting companies’ orders
It can be seen from the above data that my country’s export orders to Ukraine account for a large part of foreign trade, and the impact will be great. Just like when the overseas epidemic first broke out in 2020, a large part of foreign trade orders stagnated, which had a great impact on domestic textile companies. Not only are the orders on hand terminated or cancelled, it also affects those orders that are about to be placed, and even orders within the next one or two years. Just as the epidemic will greatly reduce consumption capacity, so will war, and its impact will be even more profound.
From a long-term or far-reaching perspective, the war between Russia and Ukraine not only led to the stagnation of export orders, but also affected the global consumption outlook. The turbulent situation in Russia and Ukraine has caused the price of crude oil to continue to soar. Commodities have also risen sharply. Flour has become more expensive, and the confidence of companies in accepting orders has also been affected. In terms of economy, after the huge earthquake in the global stock market, the economy has been affected again, and consumption capacity may be reduced again. In terms of clothing consumption, companies are afraid to place orders and have a strong wait-and-see attitude.
The editor originally judged that when the domestic epidemic is controlled and the backlog of demand in the foreign trade market is released, production capacity will increase, and there may be a wave of orders. However, the geopolitical factor of war between Russia and Ukraine was not anticipated. Judging from the current situation, things do not seem to be developing in the expected direction. It may be difficult to place a large number of orders in the foreign trade market.
Downstream textile companies are generally receiving orders, and foreign trade orders have stalled again
Returning to today’s downstream weaving market, in March, most textile companies have started operations normally. Although the degree of construction has been affected by the return of migrant workers, normal business and trade links have begun normally. However, it is understood that the situation of foreign trade orders this year is not as expected. Only a few textile bosses said that orders were placed compared to last year. Many textile bosses said that large orders were missing, the order volume was significantly reduced, and there were even price reduction operations, which led to textile bosses accepting orders. Singles are harder than in previous years.
For the textile market, the main contradiction at this stage is between the backlog of demand in the market and the slow recovery of production capacity. This leads to the fact that although there are orders in the market, the cake is too small and there is not enough to share. Therefore, the “hunger” of individual enterprises is becoming more and more obvious.
But generally speaking, although the situation between Russia and Ukraine is still tense, the global industrial chain is not easy to change. Therefore, textile bosses do not need to be too pessimistic. The cake is still there and they just need to wait for spring to bloom!
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