The currencies of emerging market countries have depreciated, and export companies have encountered a cold wave
In the first half of this year, a textile company in Huashe Street exported more than 6 million US dollars to the Indonesian market. However, in July, there was a sudden “cold wave” and the export volume suddenly dropped to zero.
Why is there such a huge contrast in the same market in a short period of time? “The Indonesian exchange rate has plummeted, and customers are waiting and watching. Many customers who had previously placed orders have asked for delayed shipments, and some have even canceled orders.” The person in charge of the company explained the reason.
What happened to the export company Huashe is also what happened to many companies in our county that are exploring emerging markets such as Indonesia, India, and Turkey.
In recent years, with the weakening of the European and American markets and the establishment of the China-ASEAN Free Trade Area, many export companies in our county have accelerated the pace of exploring emerging markets in Southeast Asia. Among them, India, Indonesia, and Turkey have become the export companies of our county worth hundreds of millions of dollars. main market. However, since this year, due to the ongoing financial crisis, the economic growth of emerging market countries such as India, Indonesia, and Turkey has slowed down and inflation has remained high. This has also triggered a sharp decline in exchange rates, including the devaluation of currencies such as the Indian rupee and Indonesian rupiah. More than 10%.
The Southeast Asian market, which used to drive our county’s export growth, is now “delayed”. The reporter found from the statistical report of the county’s foreign trade export market: Since the beginning of this year, the growth rate of our county’s exports to India, Indonesia, Turkey and other countries has slowed down significantly, with exports to India falling by about 4% year-on-year.
A home textile company in Keqiao Development Zone has been focusing on developing the Indian and Turkish markets in recent years. “But recently, customers from these emerging markets have become ‘bargaining masters.'” A manager surnamed Zhang from the company’s foreign trade department told reporters that Indian customers were only willing to bid for a four-piece silk set originally priced at US$50. $40. “Because the Indian rupee exchange rate has fallen, customers will not make much money even if they buy a four-piece silk set for US$40.”
For currencies in emerging markets, procurement costs must be taken into consideration. Many merchants have postponed orders or reduced the amount of orders. Manager Zhang said that they currently don’t know what to do about the sudden changes in the exchange rate market, and they can only turn to other new markets to make up for the shortcomings of the Indian market.
“We should not give up on the international market we have developed over the years.” Kaiming Textile Co., Ltd., located in Qixian, specializes in textile fabrics and has successfully opened up emerging markets such as Indonesia in recent years. Since this year, the export volume of the Indonesian market alone has exceeded one million US dollars every month. Having been dealing with the Indonesian market for many years, its operator Luo Haiming has an early insight into the changes in the Indonesian market caused by exchange rate issues. Two months ago, he sent the person in charge of the Ministry of Foreign Trade to investigate its market, and promptly adjusted the structure of export products, that is, changing export clothing fabrics to export white gray fabrics. “Indonesia’s geographical location and tax policies are very advantageous. White gray fabrics can not only be sold in Indonesia, but also resold to other countries.” Luo Haiming said that after the adjustment of export products, the company’s exports to Indonesia are expected to maintain 2 million meters. Export volume of white gray cloth.
In addition, industry insiders remind that export companies that use foreign currency exchange rates for settlement can use various methods such as forward settlement and application for export credit insurance to avoid exchange rate risks.
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