On November 7, the latest import and export data were released.
Data from the General Administration of Customs show that in the first 10 months of this year, my country’s total import and export value was 31.67 trillion yuan, a year-on-year increase of 22.2%. Among them, exports were 17.49 trillion yuan, a year-on-year increase of 22.5%. Some media commented on this data as a “surprise.”
How is the export performance of the textile and apparel industry?
Data from the General Administration of Customs show that from January to October this year, the country’s textile and apparel exports were US$256.53 billion, a year-on-year increase of 6.7% (a year-on-year decrease of 1.3% in RMB). Among them, textile exports were US$117.68 billion, a year-on-year decrease of 9.1% (a year-on-year decrease of 16% in RMB); clothing exports were US$138.85 billion, a year-on-year increase of 25.2% (a year-on-year increase of 15.8% in RMB).
Obviously, for the textile industry, this surprise comes from the “exports of the apparel industry.”
The export growth of the apparel industry has successively brought surprises to the industry this year: China Customs Express data shows that in the first three quarters of 2021, apparel exports reached US$122.41 billion, a year-on-year increase 25.3%, the highest growth rate in the same period since 2010, with an average growth of 4.2% over the two years.
From the perspective of development, eye-catching data can only represent the “past”, and the industry is generally concerned about the prediction of “inflection points” in the future. Careful people can find from customs data that PMI (new export orders index), which reflects export expectations, has been declining in the second and third quarters of this year. Some institutions predict that the fourth quarter may usher in an “inflection point” for continued export growth.
Rising raw materials and rising logistics costs put enterprises under great pressure
Although the export data is full of surprises, foreign trade companies are actually under tremendous operating pressure while receiving orders.
One of them is the upward pressure from raw materials.
Chen Jicheng, deputy general manager of the Denim Business Department of Guangzhou Textile Import and Export Group Co., Ltd., said in an interview with reporters: External orders are indeed There are many, but sometimes companies dare not accept orders, especially when it comes to large orders. The company will be very cautious when signing orders. It needs to comprehensively consider whether the production capacity can keep up and whether it can ensure timely delivery of orders. On the other hand, many factors such as comprehensive freight rates and rising raw materials must be considered to calculate how big your profit margin is.
“Since this year, the prices of upstream raw materials for clothing have been rising, and the prices of cotton, chemical fiber, petroleum and other raw materials have increased significantly.” Chen Jicheng said: “There is a raw material for jeans called elastic yarn. , Women’s jeans generally use high-elastic yarn, and the price per kilogram of this elastic yarn has increased 10 times.” The elastic yarn Chen Jicheng refers to is spandex.
The rise in raw material prices seems to have lasted almost throughout 2021. From the beginning to the end of the year, prices from cotton to chemical fiber filaments have been rising. China’s cotton comprehensive price index has fluctuated and climbed from 85.82 in April last year to 152.95 in October this year; according to price monitoring, the prices of various products in the domestic polyester filament market in October hit a new high in the past two years. Although prices began to rise in November Recently, polyester factories have launched major sales, but the overall year-round trend is still a straight upward curve; while the price of fiber raw materials has fluctuated and climbed, many fabric factories have recently received price increase notices from printing and dyeing companies.
Since the implementation of the large-scale power and production restriction policy in mid-to-late September, printing and dyeing factories across the country have successively issued price increase notices, and some manufacturers have even It has been sent out many times and the price is constantly being raised. This has led to a situation where downstream fabric companies dare not accept orders. A fabric trader complained: “In October, because the price of nylon gray fabric was ridiculously high and I had to pay for it in cash, I refused to take the order. In November, because the dyeing fee continued to increase, the price we had negotiated earlier Orders, production is losing money now, and I won’t dare to take orders in the future. Life will be really difficult in the second half of the year!”
Production and processing are under pressure from rising raw materials. , the pressure from shipping freight in logistics also makes it difficult for enterprises to bear the burden.
Although the epidemic is still spreading around the world, the global supply chain has been affected, and the efficiency of port operations has dropped significantly. , but the demand for container transportation market is recovering well. According to Clarkson’s forecast, global container shipping demand will increase by 6.1% year-on-year in 2021. With the active container transportation market, international freight rates have increased significantly. The Drewry World Container Index shows that the spot price of a 40-foot container from Shanghai to Los Angeles rose to US$10,503 at the end of July, a year-on-year surge of 258%, increasing cost pressure on textile foreign trade companies and squeezing profits.
The person in charge of a clothing company in Nantong, Jiangsu Province told reporters that shipping prices rose sharply in the first half of this year, with the price of a container rising from more than 2,000 US dollars to 20,000 US dollars. It has declined since September, but still reaches US$16,000 to US$17,000. “Generally, you have to order a cabinet 2 months in advance, otherwise you may not be able to order it. The price of the cabinet is not based on the price at the time of booking, but based on the delivery price.The market price of the previous week is used to sign the order. ”
Even if a container is ordered, it is troublesome to be unable to unload the goods at the port. A person in charge of a foreign trade company pointed out that if a container is stranded at the port, a 100 yuan fine will be fined on the first day it is overdue. US dollars, the next day is US$200, the third day is US$300, and so on. The superimposed fines will make a container stranded in the port pay a fine of very high numerical magnitude.
The inflection point of import and export due to cost pressure may appear
There is no doubt that foreign trade companies are now under tremendous pressure. Although the demand for orders is still there, companies are obviously much more rational in accepting orders.
Also On the one hand, from the perspective of macroeconomic data, although the export data is surprising, the PMI new export orders index, which reflects export expectations, has been declining in the second and third quarters of this year. Of course, this is the overall foreign trade new export order index, although it is not a specific index. Refers to the textile and apparel industry, but we can still detect expectations for future export trends.
Leading indicators have declined, but actual exports have maintained high growth. Does this deviation mean that Is the turning point of sustained growth in imports and exports coming soon?
PMI new export orders are a leading indicator of exports. On the one hand, PMI new export orders reflect the month-on-month changes in exports. Marginal changes in are reflected more sensitively. On the other hand, because after signing an order with an overseas company, it will need to be delivered after a period of time, which is included in the new export order, but will not be reflected in the export data until it is delivered. If PMI new export orders have been slowing down (upward) for 2 to 3 consecutive months. It is necessary to think about whether there is downward (upward) pressure on future export growth, and whether the logic supporting the previous upward (downward) export growth has changed. .
Huo Jianguo, former president of the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, said that the PMI new export order index counts the overseas signing of orders by enterprises, while the customs export data reflects the actual situation. Transaction status. Therefore, the PMI new export orders index is usually ahead of the export growth rate, which plays a certain role in predicting future exports.
“The export order index fell while the export volume increased, On the one hand, it is possible that the price increase of raw materials has caused companies to passively raise prices of end products, thereby raising export data. On the other hand, despite strong external demand, companies dare not take large-scale orders and prioritize digesting inventory. This shows that companies are unwilling to expand production capacity and continue to sign orders. “Huo Jianguo said.
Tang Jianwei, chief researcher of the Bank of Communications Financial Research Center, said that the main reason for the deviation between the PMI new export order index and the export growth rate is the rise in raw material prices and the continued rise in freight rates. . If the cost pressure of foreign trade companies decreases, the data may return to a normal state. “From the current point of view, this deviation is likely to continue until the end of this year. ”
Some reports pointed out that although there is a short-term divergence between the PMI new export orders index and the actual export performance, in the long term, the trends of the two are still Relatively consistent.
In other words, not surprisingly, the export situation will decline in the fourth quarter, and foreign trade companies will also benefit from the hustle and bustle of “cold internally and hot externally” Calm down.</p
