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[Textile and clothing export slightly weak state of small and medium-sized enterprises how to warm?]
Release date:[2022/9/27] Read a total of[194]time

Exports of textiles and garments hit the brakes in August, falling 14.7 percent. Overseas consumer market is weak, Southeast Asia diverting orders, foreign trade enterprises have felt the order anomalies.


Reporters learned from multiple interviews that the international market demand contraction, chemical fiber and cotton textile raw material prices and other multiple factors affected the export growth rate in August. "Gold nine silver ten" traditional peak season will be approaching, a number of industry insiders expressed a cautious attitude to the future market. Larger companies have an easier time with more stable customers and South-East Asian capacity. But small and medium-sized companies are already feeling the chill. "Many small factories have not received orders this year. We are expected to enter the gap period two or three months ahead of schedule and have sent workers home early." "Says one clothing boss.


Textile service export growth slowed


According to the customs data, China's textile and clothing export volume in August was USD 30.976 billion, the year-on-year growth rate slowed down by 14.7 percentage points from July's 17.58% to 2.88%, among which the year-on-year growth rate of textile export volume turned to -0.23% from July's 16.2%, and the year-on-year growth rate of clothing export volume slowed down from July's 18.55% to 5.10%.


Inflation in major foreign economies is high, central banks in the US and Europe are raising interest rates faster, and international market demand is falling back. At the same time, after the price of chemical fiber and cotton textile materials fell, the price of textile clothing fell, leading to a decrease in exports. The above two reasons dragged down the growth of China's textile and clothing exports in August.


The boss of a textile and foreign trade company in Haining, Zhejiang province, said, "From January to August [export orders] increased by 38% compared to the same period last year, because the performance of the same period last year was so poor. This year, we were lucky enough to get a new customer, and the factory they were working with made a serious mistake, so the order was transferred to us, and with this increment, we can keep the same order volume as last year."


"Southeast Asia is the domestic to do more basic factories, relatively high-end is still staying in China. But in fact, for the industry, the basic is important, although the profit is thin, but the volume of large, large proportion, can support the production of the factory, to ensure profit."


Liu Jie believes that Southeast Asia's textile export base is low, the industrial structure is not very sound, cotton and other raw materials rely on imports, production scale, industrial level, raw material cost and there is still a gap with China, so the impact of order transfer is limited.


"Cold air" hit


Recently, China Council for the Promotion of International Trade for more than 500 enterprises to carry out a questionnaire survey shows that enterprises are currently facing slow logistics, high costs, less orders and other major difficulties, 62.5% of enterprises said that the order is unstable, short order small order more, long order big order less. Market downturn, lack of willingness to consume, making it more difficult for textile and garment foreign trade enterprises to get orders.


On the other hand, the increase in orders and exports is not directly related to corporate profits. The textile foreign trade enterprises to the boss said to wealth yonhap news agency reporter, even if the orders are guaranteed, corporate profits are still eating by multiple factors, "textile exports Japan orders, first face the fluctuations in Japan, coupled with the Japanese shops basically don't rise in commodity prices, this part of the loss by the Japanese traders, Chinese traders, China factory three parties undertake, Therefore, our profits have fallen significantly this year. In addition, the prices of raw materials in the domestic market have risen widely, including electricity and steam fees. Our product net margin forecast is at least 2-3 percentage points lower."


Shenzhou International (2313.HK), a contract manufacturing leader in the garment industry, also noted in its 2022 half-year report that the export growth in the first half of the year included price increases caused by higher raw material prices, and could not be attributed entirely to the increase in export volume.


The above industry insiders further said that companies with capital strength will transfer production capacity to Southeast Asia, effectively control costs through the layout of the industrial chain, but for many small and medium-sized enterprises, can only "receive orders, no orders on the shutdown". This means that industry obsolescence is accelerating.


Compared with small and medium-sized enterprises struggling to survive, leading enterprises rely on the layout of Southeast Asia capacity and medium - and long-term cooperation with large customers, currently the order is relatively stable. The orders of the top three customers of Huali Group (300979.SZ) in the first half of the year have maintained year-on-year growth, and the current customer order rhythm has not changed, and the production capacity is climbing smoothly. New production capacity in Indonesia and Vietnam will be released in the first half of 2023. The capacity utilization rate of Jiansheng Group (603558.SH) in Vietnam has reached saturation state, promoting the volume increase of seamless business. At present, the order receipt situation of Q3 and Q4 is optimistic.


"It will take time for inflation in the US and Europe to feed through to end consumption," he said.


In terms of the export order cycle, orders for next spring and summer have already arrived. An official from the securities department of Jiaxin Silk (002404.SZ) told the Financial news agency, "From October to the Spring Festival, (the company) will enter the peak season to receive orders for next spring and summer." He mentioned that the fall in demand in the European and American markets has not affected the company's export orders, and the current foreign trade orders are still continuing the growth trend of the first half of the year, and orders are abundant.


It is hard to be optimistic in industries with low consumption momentum


Data showed that the US ISM manufacturing PMI index accelerated to fall in August to near the line between expansion and contraction, indicating that demand is about to enter a state of contraction, people's consumption of non-necessities weakened, putting pressure on domestic textile exports.


"Although we are in the peak season for gold, silver and silver, the domestic market is not thriving, and the same is true for foreign consumption."


Vietnam's textile exports are also suffering from falling demand. According to the Economic and Commercial Office of the Consulate General in Ho Chi Minh City, Vietnam's textile and apparel industry exported about $30.2 billion in the first eight months of this year, up nearly 20 percent year-on-year to an average of $3.7 billion to $3.8 billion per month, but is expected to export only $3.1 billion to $3.2 billion per month in the remaining four months of this year. Le Chin Chang, chairman of Vietnam Textile and Apparel Group, predicted the market downturn would last until 2023.


Shenzhou International also mentioned: "It is expected that from the second half of the year to the first half of next year, the textile and apparel industry may suffer from the impact of the decline in capacity utilization due to the lack of demand, global inflationary pressure will continue, and the profitability of enterprises will continue to be under pressure."


From the perspective of the total export of textile and clothing in January to August, the growth rate still maintained double digits, reaching a year-on-year growth rate of 11%; Textile exports reached US $102.27 billion, up 10.2%, and garment exports reached US $118.03 billion, up 11.6%.


Even if the peak season is not prosperous, but it is still the peak season, the increment will be guaranteed. Liu Jie believes that the "gold nine silver ten" traditional peak season is coming, China's textile and clothing exports are still expected to gradually volume, quarter-on-quarter growth is expected to turn positive. Faced with demand improvement, inventory decline, cost rebound and other beneficial support, coupled with the depreciation of the renminbi to enhance the international competitiveness of export enterprises, China's textile service export situation is expected to improve.


Hai'an County Qinfeng Chemical Fiber Co., Ltd. specializes in production and sales:polypropylene staple fiberPolyester Staple Fiberfunctional polypropylene short fiberfunctional polyester staple fiberhydrophilic polyester staple fiber polypropylenePP staple fiberpolyester staple fiber.

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