Can Foreign Trade Orders Cancelled By Overseas New Crown Pneumonia Epidemic Situation Develop Domestic Market?

The impact of the spread of the new crown pneumonia epidemic across the world has closed many ports in the world. Recently, the Jiangsu and Zhejiang textile market is in the peak of the sharp reduction or cancellation of foreign trade export orders. This situation has brought a lot of trouble to cloth boss. The fabric has become stock and finished products have become stock or spot, which is very difficult.

In view of the cancellation or sharp reduction of this order, a special group emerged in the domestic market. Xiaobian called it "the king of collecting money". According to cloth boss, there are already domestic customers who want to buy the foreign trade orders which have been cancelled by the fabric suppliers. In fact, this is a kind of opportunistic order, and Xiaobian is known as "picking up the leak".

Most cloth owners are reluctant to sell the cancelled orders at a low price.

1 hold on, or continue the order later.

From the perspective of fabric suppliers, the cancellation of foreign trade orders will be transferred to domestic customers at a low price. This is a last resort. First of all, the cancellation of orders is mainly due to the outbreak of the epidemic, the closure of overseas countries, the closure of the epidemic, the resumption of production of clothing factories, there is still a possibility of continuing orders. Cloth bosses are lucky to expect customers to continue their production. Therefore, in the short time, most of them take no action.

In addition, if the cancelled order is sold to domestic customers at a low price, it can be said that the loss is very large, not only without profit, but also hard to recover. Take the fabric of 10 yuan / meter price as an example, at present, the profit of foreign trade orders of fabric traders is generally around 10%, and the cost is 9 yuan / meter. If the domestic sales account is purchased at 20 percent off, the selling price will be 8 yuan per meter, and the fabric supplier will lose 1 yuan per meter. And the 20 percent off sale is only an example of the idealization of Xiaobian, which may actually be a lower discount, only 55% off. This account is not acceptable to a few cloth bosses.

2 cancelled orders can still be sold for two times without losing money.

Xiaobian asked a cloth boss who specializes in simulation silk trade in the interview hour hand. He said: "I prefer to put it in the warehouse when the stock will not come out at a low price. After the epidemic is over, the customer may continue to order." If customers do not, gray cloth can be sold again, fabric products can be sold on the spot, even if there is no profit, it will not be a big loss.

The cancelled order fabric can be placed in the warehouse without affecting the two sale. Even if the market is in a low state, the cloth boss loses the processing, the grey cloth falls 0.2-0.4 yuan / meter, only is the profit drops, does not lose. The finished fabrics will be sold on spot and sold at normal prices, and will still be profitable. So the boss will not sell the cancelled orders at a low price.

Apparel manufacturers to save foreign costs

But from the point of view of clothing manufacturers, this is indeed a desirable way. The fabric quality of foreign orders is generally higher than domestic orders, and the testing standard is also strictly up to standard. If used for domestic orders, the production will have very good results. The cancelled order is actually inventory, and the price of the re sale is the fracture price. The clothing manufacturer starts with cheap prices. It is killing two birds with one stone. At the same time, it helps long-term fabric suppliers to deal with inventory and promote cooperation between the two sides.

Picking up foreign trade orders will affect domestic market prices.

Without considering the profitability of buyers and suppliers, this practice will also disrupt the rhythm of the entire textile market. In order to save costs, the domestic customers are likely to cancel the orders they had originally issued, and replace them with the cancelled foreign orders. There will be no new ones in the near future. As a result, it affects the single volume of the domestic market, and may bring about a series of influences such as the unsalable fabric of the downstream fabric manufacturers, the reduction of the number of printing and dyeing warehouses, etc. Even because of the seasonal climate in many parts of the world, the sale of export orders by domestic customers is likely to overdraw the fabric orders in autumn and winter, thus affecting the market situation in the second half of the year.