Since the beginning of this year, the upstream, midstream and downstream links of the textile industry, from raw materials to production to sales, have been having a tough time. The economic environment and industrial transformation have forced the textile industry, like other industries, to enter an era of mixed joys and sorrows. It has always been said that “the sun always comes after the storm, and the market will always be good”! A seemingly simple sentence, but it seems so heavy. To be honest, now that the peak season in March has passed, friends in the textile industry are frowning more and more. The tepid market in the peak season makes them feel that it is difficult to make good progress in the later period. At the same time, there have been constant disputes in the external market recently, and shorts are greater than longs. The industry ” “Spring” may come later!
About 45% of investment in the apparel industry comes from China
The suspension of trade between the United States and Myanmar is not conducive to Economic and trade exchanges between China and Myanmar
The coup situation in Myanmar has become increasingly tense. On March 27, the day Myanmar held its Army Day military parade, street demonstrations broke out in many places across the country, and military and police opened fire. The United Nations said the conflict resulted in the deaths of at least dozens of people, including children.
After the bloody conflict on Army Day in Myanmar, the defense ministers of 12 countries including the United States, the United Kingdom, Japan, and Germany issued a joint statement condemning the Myanmar military and calling for an end to violence. U.S. President Joe Biden described the incident as “absolutely unacceptable” and said sanctions were being planned in response. Later, the Office of the United States Trade Representative stated in a statement that it would suspend all trade between the United States and Myanmar effective immediately.
There are currently more than 600 garment factories in Myanmar, with foreign investment and joint ventures accounting for more than half. About 45% of investment in the garment industry comes from China, and the Myanmar-China Garment Chamber of Commerce has been established. Garment factories are mainly concentrated around Yangon, employing about 500,000 local workers. In 2019, Myanmar’s clothing export volume was nearly US$5 billion, with the main export markets being Japan, the European Union, South Korea, China and the United States. Due to the Generalized System of Preferences (GSP), Myanmar garments exported to the EU can enjoy duty-free benefits. However, the development of Myanmar’s industrial chain is uneven. The garment industry is growing rapidly and the upstream textile industry is developing slowly. There are no large-scale textile mills and printing and dyeing factories. Raw materials such as yarns and fabrics mainly rely on imports. China is the main source of imports of raw materials. In 2019, China exported US$2.495 billion in textiles to Myanmar, accounting for 2.07% of my country’s total textile exports, ranking 13th among textile exporting countries. At the same time, in recent years, well-known companies including Lu Thai have invested in Myanmar. As countries along the Belt and Road, China and Myanmar have close economic and trade exchanges and are important partners of our country.
In 2020, Myanmar’s exports to the United States were US$445 million, accounting for 15% of the total imports of textiles and clothing from the United States. 0.5%. Although the total share is relatively small, due to the epidemic in 2020, when the total textile and apparel imports of the United States decreased by nearly 20%, imports from Myanmar increased by 31.24% year-on-year, ranking first in the year-on-year growth of U.S. imports in 2020, indicating that the future Growth potential remains high. However, due to the turbulent situation in Myanmar after the coup this year, American buyers have tried their best to avoid purchasing from Myanmar, and imports to the United States have declined to a certain extent. After the United States announced the suspension of exchanges, it further hit Myanmar’s exports to the United States, which will also reduce the import of raw materials from China. Under the turmoil, not only the people cannot live a stable life, but it is also not conducive to the economic and trade exchanges between China and Myanmar.
Maersk expects capacity to drop by 30%
Suspension of short-term bookings for Asian exports to the world
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Although traffic has been restored through the Suez Canal, hundreds of ships are still waiting.
The interruption of the canal may have a series of chain reactions in early April: shipping schedule delays, skyrocketing freight rates, shortage of containers at the departure port, new congestion at European destination ports, etc., etc., which will also This prompted shipping companies to once again either passively or actively suspend sailings and jump to ports to increase prices.
The world’s largest container shipping company Maersk said on Tuesday that the blockage of the Suez Canal and the large number of ships waiting outside the canal may reduce shipping capacity by 20% to 30% in the next few weeks. %.
It also noted that it could take up to a week to get the many waiting ships through the canal.
“At this time, we estimate that delays may affect 20% to 30% of ocean freight capacity in the coming weeks, depending on market dynamics, and we will develop contingency plans.” Maersk a spokesman said.
“The canal has been blocked for six days, so it will take at least six days to clear the queue of ships. This will put further pressure on capacity, and the Mediterranean and There will also be queues at European ports.”
Some short-term export bookings in Asia, Europe, North America, Africa and other places are suspended!
In view of the chain reaction caused by this, Maersk has decided to suspend short-term online bookings through the Spot booking platform, and also suspend short-term contract bookings in some areas this week and in the near future.
Maersk Announcement
The suspension of short-term booking services includes:
Asian export business: Due to the expected shortage of shipping capacity and containers, short-term bookings for Asian exports to the world are suspended.
Middle East India and Pakistan export industryService: Suspension of short-term bookings for exports from India and Pakistan in the Middle East to Europe, North Africa, the east coast of North America, and to West Africa and Latin America via the Mediterranean.
European export business: Short-term bookings for European exports to Asia, the Middle East, the Indian subcontinent and Oceania are suspended.
North American export business: Short-term bookings for North American exports to the Middle East, Indian subcontinent and East Africa are suspended.
Latin American export business: Suspension of short-term bookings from the east coast of South America to the Middle East, Indian subcontinent and Asia via the Mediterranean, as well as from Central America and the west coast of South America to the Middle East and the Indian subcontinent.
Africa export business: short-term bookings from East Africa to Europe, and from West Africa to Asia, the Middle East and the Indian subcontinent via the Mediterranean are suspended.
Maersk emphasized that this adjustment is only temporary in order to quickly transport existing cargo and empty containers to where they are most needed. area.
“In addition to the reduction in shipping capacity, the Suez Canal blockage will also cause serious port congestion. Because ships have missed the previous window period, port calling adjustments need to be made to reduce shipping capacity. losses. Our current job is to actively find alternatives for customer shipments, rebuild a stable network, and maintain information transparency.” Maersk added.
Xinjiang cotton controversy continues to ferment
Textiles may have an impact on future clothing exports
In the recent period, the United States and Europe have continued to take actions against China’s exports of cotton and downstream products. Some international brands and international institutions have launched a campaign based on lies and false information. Its actions of excluding Xinjiang cotton and its products from its business activities, Biden’s speech at his first press conference, and mutual sanctions between China and the EU all reflect the joint checks and balances of the United States and Europe against China.
It is understood that most of the current orders in the textile foreign trade market come from European and American clothing brands. Although many domestic fabrics are exported to Southeast Asia, these fabrics are ultimately It is also made into clothing and exported to Europe and the United States. In the process of boycotting H&M for slandering Xinjiang cotton, other European and American clothing brands may be involved. It may eventually have an impact on the entire foreign trade of clothing and textiles.
Wu Xinyang, a cotton researcher at the Agricultural Products Division of CITIC Futures, believes that the essence of the Xinjiang cotton crisis is the continuation of the trade war. It is not simply directed at cotton, but a threat to the global textile industry. The struggle for the right to speak.
Some macroeconomic analysts believe that the United States and Europe have continued to take actions against my country, which further confirms the United States’ ruling idea of uniting its allies and the European Union to check and balance China. U.S. and European apparel companies stigmatize Xinjiang with “forced labor” and “racial discrimination” in order to attack my country’s cotton industry. This is a typical politicization of business issues, and its essence is to contain China’s rise.
Wu Xinyang said that domestic cotton production is concentrated in Xinjiang, and the market is basically self-produced and sold. Due to the gap between domestic production and sales, cotton from the United States, Brazil and other countries needs to be imported every year to supplement. Furthermore, the Xinjiang cotton controversy is more aimed at China’s textile supply chain, which uses Xinjiang cotton as the main raw material. Although in recent years, the domestic textile industry has been limited by factors such as labor costs, trade frictions and environmental protection pressures, and there has been a trend of active transfer of textile production capacity outwards. The share of Chinese clothing in the European and American markets has also been relatively reduced, but this does not mean that Western countries Attempts to “de-Sinicize” the textile and apparel supply chain will succeed.
For now, global trade frictions still bring great uncertainty to foreign economic and trade relations and even the world. In the past few years, the issue of Sino-US tariffs has increased the concerns of American buyers, causing fluctuations in some orders. According to feedback from textile and clothing traders in Guangdong and Zhejiang, some European and Japanese orders have been canceled and delayed in delivery since mid-March. The number of exports has increased, and export companies are increasingly worried. It is bound to have an impact on the future export of textiles and clothing.
In the final analysis, whether the market can improve or not depends on market consumption. Although the entire domestic market has gradually entered the recovery period after the epidemic, the instability in the foreign trade market may subsequently affect the timely placement of orders and increase risks.
In the future, the macroeconomic situation will be more complex, affected by trade frictions, domestic and foreign economic conditions, etc., which will affect the periodic rise and fall of polyester raw materials and the growth and decline of textile and garment enterprises to a certain extent. With the current export situation, textile companies must prepare for a rainy day! </p
