There Is No "Warm Yang" In The Cotton Textile Market: The Depreciation Of The RMB Exchange Rate Is Not Conducive To Higher Prices.

In the middle of last month, when the people's Bank of China did not give any warning in advance, the central parity of RMB against the US dollar was suddenly cut to 1000 basis points, to 6.2298, which not only set the biggest one-day decline since the official exchange rate of RMB was merged with the market exchange rate in 1994, but also made the RMB exchange rate fall to a new low in April 25, 2013.

One stone stirred up waves.

The devaluation of monetary initiative is often seen as a improvement by a traditional economist.

The industry's "straw".

For many years,

There is a false proposition which misleads investors. The main idea is that currency devaluation is conducive to downstream textiles.

Industrial exports will increase the volume of export orders, and then increase.

And the use of cotton yarn.

As demand increases, the price of cotton and cotton yarn will go up, thus making the whole industry chain flourish.

This "magic soup" really knocked the brains of many academics.

"The depreciation of RMB will help improve the export price of textile and clothing?"

This is the original saying of the head of a textile export enterprise in China.

China's textile industry is positioned at the middle and low level, competing with other countries, with price advantages and no other core technological advantages. Therefore, the domestic textile industry has long been a very low profit and a synonym for "sweatshops".

It is understood that in the middle of last month, when the RMB depreciated sharply against the US dollar in the middle of last month, a few days later, it received foreign mail, asking for a 2% reduction in the next batch of orders. If it did not agree, the order would be given to countries with low labor costs such as Vietnam, Laos and Kampuchea.

Enterprises can only be forced to accept the requirements of foreign businessmen.

"Artificial sword, I am fish."

In the absence of technological advantages, we can only survive in the vicious cycle of "no minimum, only lower", in the context of price competition alone.

The head of the textile enterprise exclaimed.

In fact, the advantages of RMB depreciation have been taken away by foreign businessmen. Chinese textile enterprises still can not enjoy any benefits, and still need to work hard to earn the meager hard-earned money.

In addition to the difficulty in raising the profit of textile products, the import raw materials will also increase. The cost of importing cotton yarn will be greatly increased.

At present, textile enterprises adopt the strategy of "buying and selling with their products". There are not many stock products. Most of the orders are still in customs clearance and sea. The depreciation of the RMB exchange rate makes the purchasing cost of enterprises rise, so that the profits of the industry will further converge, which will weaken the demand for cotton and cotton yarn in a disguised manner, and is not conducive to the higher prices.

This sudden overnight depreciation seems to have a supporting role in the short term for cotton and cotton yarn quotations, but in the long run, it has no advantages to exporters, even if there are so-called benefits, which are short-lived.

Because a simple imitation and neglect of product development, only cheap labor and primary resources industries, it is difficult to obtain long-term stable profits.