In the past few days, the number of new confirmed cases in India in a single day has remained at a high level of more than 250,000, and the epidemic is still very serious. Epidemic data released by the Indian Ministry of Health on the 20th showed that there were 267,110 new confirmed cases in the country, bringing the total number of confirmed cases to 25,772,440; there were 3,874 new deaths, and the total number of deaths was 287,122.
The COVID-19 epidemic in India is raging, not only dragging down the country’s economy The recovery has also affected the supply chains of many industries around the world, and the textile industry is one of them. Recently, there has been news that a large number of textile orders from India have been transferred to the Chinese market. However, the reporter’s investigation found that although many domestic companies did receive some transfer orders, these orders were not as “good” as imagined.
Xu Dong, the person in charge of a large textile company in Shandong, told the China Times reporter: “Return orders are not all placed by Indian customers, but by European and American customers. Orders are placed directly, and some are resold through customers in Southeast Asia. We also received a small order last month. The production volume of this batch of orders is not large, but the delivery time is short, only 3 weeks, so the profit is not high.”
As for the return of orders from India, some textile export traders in coastal areas do not feel strongly. “These so-called return orders are mainly for mid- to low-end processed products, and most of them are These are ‘small and short-lived’ orders, so we generally don’t accept them. The profit is not high and the risk is high, because once the epidemic situation improves, these orders will be transferred back, and if you don’t go with your wife, you will lose your order.” Mr. Chen, general manager of Zhejiang Ningbo Shuntong Export Trading Co., Ltd., told this reporter.
The epidemic has caused orders to shift to China
As we all know, India is the world’s largest cotton producer In the country, the textile and apparel industry is one of India’s largest sources of foreign exchange earnings. The textile industry accounts for about 15% of India’s total export revenue. As a labor-intensive industry, textiles and clothing have been severely affected by the epidemic this time. Data provided by Wozil Consulting Company shows that in the major garment towns of Delhi and Bangalore, the labor absenteeism rate in the garment industry is as high as 50%; last year, consumption and exports in the Indian garment industry decreased by 30% and 24% respectively.
Therefore, many international buyers have Hearing the news, he shifted his orders to China. Tang Shuangshuang, an analyst at West China Securities, pointed out to reporters that India’s yarn production capacity accounts for more than 20% of the world’s total. If Chinese companies can successfully win more orders lost in India, the domestic textile industry may also receive benefits in the short term due to the Indian epidemic.
In addition, the “city closures” and unstable freight channels in India, Pakistan and other Southeast Asian countries have not only led to the return of short-term orders, but also the return of long-term orders from Europe, the United States, Japan and other countries. Gradually overflowing, domestic textile and garment enterprises’ concerns have decreased, and their order-taking sentiment has increased.
In fact, as early as October last year, when India showed signs of a second wave of epidemics, many textile orders shifted to China. A textile factory in Hebei said that since September 2020, the company’s overseas orders on the Internet platform have increased rapidly, mainly from the Indian market. Orders for towels reached 2 million in just one month, which is equivalent to twice the same period last year. A private enterprise in Jinhua, Zhejiang Province even received a large export order of hundreds of thousands of tablecloths from the international brand ZARA, and this order was originally produced by a printing company.
Blum Oriental, the domestic leader in colored spinning, showed strong growth in the first quarter due to the dual benefits of the recovery of overseas orders and the expansion of production capacity. According to the company’s performance forecast for the first quarter of 2021, net profit attributable to the parent company increased by 135 million yuan to 164 million yuan, a year-on-year increase of 190% to 230%.
Blum Oriental insiders said that the company undertook a wave of reshoring orders in the second half of last year. Since the fourth quarter of last year, the company’s order situation has been very good and is close to full. production operation. Based on the order and production situation, it is prudent to estimate that the performance in the first half of this year will increase significantly compared with the same period in 2020, which has a relatively low base, and even be better than the same period in 2019 before the epidemic.
The accelerated transfer of orders has also directly boosted my country’s textile and apparel exports. Data show that in the first quarter of this year, China’s textile and apparel exports amounted to US$65.1 billion (approximately 421.4 billion yuan), a year-on-year increase of 44%. Among them, textile exports were US$31.81 billion (approximately 206 billion yuan), a year-on-year increase of 40.3%; clothing exports were US$33.3 billion (approximately 215.5 billion yuan), a year-on-year increase of 47.7%.
Return orders are mainly “short-term and small”
About the urgent need for a large number of textile orders in India Turning to news from the Chinese market, in the eyes of professionals, it is normal market behavior for multinational companies to adjust production orders globally and for international buyers to select suppliers based on production capacity.
Xu Dong told this reporter that although there has been a return of overseas orders recently, the contract prices of these orders are mostly uncompetitive and they are all mid- to low-end. Processing products is not very profitable.
An industry professional�� also analyzed to reporters: “Upstream brands can get away as long as they cancel the order without paying the balance. Such orders are transferred quickly, and buyers pay more attention to price and delivery speed. When India’s domestic production capacity recovers, Whether orders can remain in the country for a long time requires further observation. The textile industry is a labor-intensive industry and is very sensitive to labor costs. In recent years, with the increase in labor costs in China, many brands have relocated their factories to Vietnam, etc. Southeast Asian countries.”
And more importantly, the rise in raw material prices this year has squeezed the profits of companies. Therefore, even if many companies have increased orders, they are likely to In the end, it’s “losing money and making money”.
The above-mentioned Ningbo export trader Mr. Chen told this A reporter told a reporter, “Last year, the company’s profit was still about 10%, and this year it may be less than 5%.” Therefore, he is very cautious in accepting orders at present, and would rather not do it than lose money.
It is worth noting that due to the raging epidemic, some ports and logistics industries in Southeast Asia have been shut down. For example, the Indian container port Kandla announced that it will close its terminal operations from April 24, and other ports in India and Thailand may be forced to suspend operations one after another due to the epidemic. Therefore, in Xu Dong’s view, Chinese companies need to be very cautious when accepting orders from India, Myanmar and other countries. Due to various reasons such as the epidemic, port shutdowns, and logistics delays, buyers may not be able to receive the goods on time, resulting in delays, breaches of contract, or even abandonment. single phenomenon.
Under the impact of the epidemic, the supply of India, the second largest textile manufacturer and exporter, ” stalled “, accelerating the start of a new cycle in the global textile and apparel industry. China is the country with the most complete textile industry chain in the world, but its current advantages are mainly reflected in the stability and security of the supply chain. The upgrading of the industrial chain in recent years has also enhanced the competitiveness of the textile industry.
In addition, according to the forecast of China·Keqiao Textile Index, although exports will still maintain growth in the second quarter of this year, the growth rate will return to normal levels. my country’s textile and apparel and other bulk products Commodity exports will continue to achieve restorative growth.
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