Exchange Rate Loss Nearly 30% Of Hebei Garment Trade Merchant "Sudden Death"

Since the reform in 2005, although the RMB has continued its general pattern of slow appreciation, by the middle of July 2008, after the RMB exchange rate reached 6.8 yuan against the US dollar, it began to maintain a steady trend for nearly two years.

Exchange rate loss nearly 30% Hebei clothing trade "sudden death"

"For our pure foreign trade, two factors are uncontrollable, one is raw material, the other is exchange rate."

Speaking of the recent market situation, Li Yue, who has done more than 4 years of foreign trade clothing business in Shijiazhuang, said helplessly.

Li Yue, a small foreign trade company, runs the main business.

Li Yue said that under normal circumstances, from customer enquiries to company quotations, deposit in place, and then to the factory for documents, clothing.

Take an order of 1 million US dollars, for example, if the order at the beginning of June was RMB 1:6.8 against the US dollar, and by September 21st, the RMB against the US dollar had reached 1:6.69.

"Do not belittle this 0.1 yuan, 1 million dollar list, our exchange rate losses will be as high as 100 thousand yuan at a time.

In ordinary years, the profit margin of clothing trade is about 5%-10%, which means that even if the exchange rate is kept at 1:6.8 level, the profit of the order of 1 million dollars is only about 350 thousand yuan.

"Only exchange rate, we lose nearly 30% of our profits."

Li Yue said that in the past half a month, the orders of the peers had basically been determined in advance, and the foreign traders who had no orders at the time were afraid to pick up the new ones.

"If the appreciation of the renminbi continues, then a single list will probably blow up its own hands, so it is better to not do it for the time being."

Over the past 3 months, the total appreciation of RMB has exceeded 1.8%.

In September 27th, the central parity of RMB against the US dollar was 6.7098, which rose slightly compared with the previous trading day. However, the exchange rate of banks still lingers around 6.69 yuan.

According to the historical data of the central parity of RMB against the US dollar of the people's Bank of China, the appreciation of RMB against the US dollar from June 21st to September 21st is about 1.87%.

From 1:6.7907 in September 8th to 1:6.6997 on the 21 day, only 9 trading days, the speed is very fast.

Li Yue said that in order to cope with the rapid appreciation of the RMB, foreign trade enterprises generally have two ways, one is to raise the quoted price, and the other is to postpone the delivery of the two.

But raising the offer is clearly unwise.

Figures from the Hebei Foreign Trade Department of the commerce department show that as of now, Hebei's foreign trade business record enterprises have totaled 14691.

One person

And trying to delay delivery is not a permanent solution.

If it is an old customer and the scale of the paction is large, the foreign trader can postpone the delivery time briefly, but most orders may have default risk if the delivery is extended.

Moreover, in the context of the continued appreciation of the renminbi, delayed delivery is not safe. "Maybe a renminbi will appreciate again, and the losses will be even greater."