RMB Exchange Rate Depreciation Cotton Yarn Importers Fear A New Round Of Shuffle

In recent two years, due to cotton price and artificial factors, domestic

Facing the aggressive situation of India Pakistan yarn, the industry is hard to resist and fight. The market share is being eaten up step by step at home and abroad.

The good news of the recent depreciation of the RMB exchange rate has given the domestic textile industry a chance to breathe.

It is understood that Chinese yarn

The volume reached a high level in 2013 and 2014, and the annual import volume was over 2 million tons. Customs data showed that the import of cotton yarn in 2015 1-6 months amounted to 1 million 184 thousand tons, of which 1-4 months from

Imported from three countries, Pakistan and Vietnam.

The quantity has already exceeded 2011 annual import volume, and the import momentum is strong.

After the depreciation of the RMB exchange rate, the pressure of subsequent orders for importers to face the market is facing.

According to the 90 day letter of credit, when the original order was made, the exchange rate was calculated at 6.2, the current exchange rate rose to nearly 6.4, and the cost of import yarn remittance rose by several hundred yuan.

Domestic and foreign cotton yarn prices are further integrated, the advantages of outer yarn are gone, import yarn trade default phenomenon is likely to increase, importers fear a new round of shuffle.

A cotton textile industry in Guangdong said that before the RMB exchange rate fell, the price of domestic and imported low price yarn was basically flat with the continuous decline of domestic cotton prices. The yarn had no advantage in terms of price or quality, and the adjustment of the exchange rate fell, and the growth of imported yarn was curbed, and sales would be in trouble.

In the face of the risk of exchange rate adjustment, cotton yarn importers can only get caught. Wu Faxin, general manager of Greater China of Guangzhou Yarn Import and Export Co., Ltd., once wrote that with the increase of the RMB exchange rate market and the increase of fluctuation, "two-way fluctuation" will become normalization, and the future exchange rate will fall to 7.

First of all, it suggests that it should do well in anticipation of the balance of foreign exchange or reduce the risk exposure of foreign exchange as soon as possible; secondly, establish a "currency to rush position" lock rate in the international money market, or advance the settlement of foreign exchange through the "Forfaiting" way, and pass on the exchange rate risk.

Recently, the northern textile enterprises association of India said that the cotton mills affiliated to the northern textile enterprises association in India consider reducing production and closing the factory one day a week. The main reason for this decision is high yarn stock and tight funds.

The Spinning Association of southern India also unanimously decided that the sale of yarn would be cut off for a week starting in August 17th, so as to avoid some traders from further lowering the price of yarn.

The depreciation of the RMB exchange rate will make the foreign yarn production enterprises worse and worse. It will boost the domestic cotton yarn in the short term. But in the long run, the domestic textile enterprises need to practice their skills and improve the quality and grade of the products if they want to really change the passive situation.