At present, the epidemic situation of new crown pneumonia in China has been effectively controlled, and various industries and industries have gradually resumed production in an orderly manner. However, the spread of overseas epidemics has accelerated, and many defense controls have been upgraded in the United States, Italy, Spain, France, and Germany. With the implementation of overseas city closure measures, a large number of branded retail stores were closed, and end-market consumption was immediately suppressed. A number of international apparel brand retailers have started to cancel orders in large numbers, and Chinese textile foreign trade companies that have just worked hard to streamline upstream and downstream production and supply channels have encountered a second round of problems in a short time.
Cancellation of foreign orders caught suppliers by surprise
A large number of cancellations of foreign trade customers in the short term have brought great uncertainty to the development of foreign trade enterprises this year. In the developed areas of Jiangsu and Zhejiang textiles, it is very common for companies to be cancelled.
Zhang Weifeng, general manager of Zhangjiagang Free Trade Zone Mingtu Chemical Co., Ltd., who has been engaged in the dyeing and chemical industry for more than 20 years, told the reporter of China Textile News that in the past week, the cancellation of overseas orders was particularly serious among German, French, and American customers. In the area of Keqiao, Shaoxing, Zhejiang, many dyeing factories have been affected as a result, and about 70% to 80% of enterprises have encountered cancellation orders. Previously, printing and dyeing enterprises that were ready to make up for the loss on time. The grey cloths just purchased were still stacked in the workshop. Now after receiving the notice of cancellation, production can only be suspended. The corresponding market demand for dyestuffs has also dropped significantly.
"The biggest difficulty now is not the flow of funds or other problems, but the cancellation of orders. Some companies have stopped printing and dyeing as soon as the grey fabric arrives at the dyeing factory. Many local companies produce chemical fiber and flannel products. It ’s very strong. Some small companies have rented factories for production. Now missed orders in the current season are not just a business issue, but they missed a season. "Zhang Weifeng explained.
In addition to the emergency suspension of the production process caused by the cancellation of orders, there is also a risk that the completed orders cannot be shipped and the destination port does not accept the goods, and the risk of corporate exports has risen sharply.
Jiangsu Changzhou Dongao Garment Co., Ltd. is a professional manufacturer of jeans casual clothing for Levi's brand. The products are exported to French, German, British, Italian, American and other European and American brand shops. The factory has 19 production lines and more than 1,300 There are 340 employees in the washing plant alone, and the company has a relatively complete upstream and downstream production supply chain. After the Spring Festival, the company has been operating normally since the resumption of work. According to the reporter of China Textile News, East Olympic also recently encountered the situation of order cancellation. For example, US customers have clearly requested that if existing orders can be shipped and shipped before April 2nd, they can still be accepted, and the port cannot accept them after the deadline. Therefore, enterprises are working overtime to catch up with production, and can basically reach the deadline to ship before the deadline.
Jiangsu Taizhou Weina Fashion Co., Ltd. is a fashion export company with an annual export scale of about 30 million pieces. Recently two consecutive export orders were cancelled by customers.
After the order was cancelled, Wuxi New Belden Garment Co., Ltd. decided to give employees two months off due to lack of orders. "Some foreign customers communicate with their suppliers: if the grey fabric has been cut and put online, the finished products made in this batch can continue to be delivered, but the price will be discounted and you need to talk to the customer again; if the company has not yet arranged the grey fabric On-line cutting, then this part of the order customers will no longer want. "A person familiar with the matter told reporters.
Overseas epidemic spreads and prolongs production and sales impact period
According to the statistics of the General Administration of Customs of China, under the influence of the epidemic, China ’s textile and apparel exports in the first two months of this year were US $ 29.83 billion, a year-on-year decrease of 20%, which is higher than the average level of 17.2% year-on-year decline in the country ’s exports of goods and services. The textile and apparel production and supply chain is relatively long, and in addition, it has formed a global layout, which has affected the textile industry more severely than other manufacturing industries, and the situation is even more severe.
The orders of terminal brands are suddenly cancelled, and the recent sudden drop in prices of upstream raw materials such as crude oil and cotton has caused products still in circulation and raw materials that have been purchased at relatively high prices to become unprocessed. Form a larger loss. This makes foreign trade enterprises face severe challenges.
In a recent webinar titled "Crisis and Way Out" in China's Textile Industry under the New Crown Virus Epidemic, co-organized by China Chamber of Commerce for Import and Export of Textiles and Shanghai Xiwei, Wang Lizi, a researcher at Dunhe Industrial Investment Management Co., Ltd. According to Jie's analysis, currently, from an international perspective, the restrictions on the movement of people in countries with severe epidemics have just begun, and the duration is still difficult to predict. The retail industry is facing relatively large losses. In the second quarter, foreign countries will likely repeat the situation in China in the first quarter, and the short-term market demand will decline sharply.
Dunhe industry analysis believes that from the domestic perspective, the market is affected mainly from February to March, with three main effects: First, the window period for spring clothing sales has been greatly reduced, and there will be no chase for orders, and a backlog of spring clothing It is a foregone conclusion. Second, the orders for summer clothing need to be observed. Due to the problem of capital flow, it is difficult to see explosive order growth. Third, the pressure of the epidemic on consumption will gradually manifest. However, the current overseas epidemic is fermenting, which will affect China's export production from March to June. Some overseas summer orders may be temporarily cancelled, which will have a great impact on the production side. In addition, the duration and impact of the epidemic have determined the status of overseas fall orders.
"Single withdrawal" affects global supply chain
According to the reporter's understanding, in the global textile supply chain, it is not only China that has encountered cancellation of foreign trade orders. Bangladesh, one of the world's major suppliers of textiles and apparel, is also performing the same story. According to media reports, Bangladesh ’s garment industry is on the verge of disaster in the past week. Rubana Huq, chairman of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that 490 factories in Bangladesh have received cancellation notices for US $ 1.5 billion in garment export orders. She called on retailers not to cancel confirmed orders and continue to accept orders before July, after which companies will gradually adjust their inventory. "Because we need to pay wages to workers, we have real problems that need to be resolved, and we can't starve 4.1 million workers. The brand owner and we were partners last month, and now they are the same." Hu Ke said.
Because many brands of spring and summer are basically in their hands, some may be delayed to the market in the fall to reduce losses, which will directly reduce the demand for autumn supplies. Some analysts believe that due to different national conditions and cultural differences, the situation of epidemic control in Europe and the United States is still difficult to judge. For textile and apparel export companies and suppliers, the decline in orders may continue.
The market supply and demand situation has deteriorated due to the impact of the epidemic, forming a short-term supply-demand mismatch. The textile and apparel industry has very close relations with the international market. From this point of view, the textile industry will be more difficult in the short term.
"This year is destined to be the most unusual year. How to survive tenaciously is the biggest problem we need to face now." Many export companies think so.
