Data Review: Strong Export Of Clothing In September 2021 Is Expected To Continue

Textile and clothing exports hit the highest level in the same period of history

According to the statistics of China Customs, from January to September, China's textile and garment exports totaled US $227.59 billion, a year-on-year increase of 5.6%, 12.7% over the same period in 2019, a record high level in the same period. The export scale of China's textile and garment industry has been able to reach a new high even though the export of anti epidemic materials such as masks has dropped by 80% and many costs have risen unprecedentedly; Second, international demand continues to pick up; Third, some orders have been returned in succession; Fourth, the price rise factor pushes up the export amount.

Clothing exports hit a new high in the same period since 2016, but the growth rate slowed down quarter by quarter

From January to September, clothing exports reached US $122.42 billion, a year-on-year increase of 25.3%, an increase of 8.5% over the same period in 2019, a record high in the same period in six years. In the first and second quarters of this year, the growth rate of China's clothing export was 47.4% and 35.7% respectively. Due to the high base last year, the growth rate in the third quarter slowed down to 9.4%, but the export scale remained at a historical high.

Explosive demand in the US market leads to high growth

Driven by the fiscal and monetary stimulus plan of the United States, international demand has been compensatory. In particular, since March, the U.S. clothing retail has reached a record high, breaking the previous record for six consecutive months, superimposing on the repeated epidemic situation in Vietnam, the second largest clothing supplier of the United States, driving China's clothing export to maintain a rapid growth. Especially from July to August, about half of China's clothing export growth came from exports to the United States.

China's market share in the United States and Japan is stable, while its share in the EU is squeezed by Turkey and others

In the first eight months, China's clothing import market share in the United States, the European Union and the United Kingdom decreased by 0.7, 2.3 and 3.1 percentage points respectively, while its market share in Japan and South Korea increased by 0.8 and 1.7 percentage points respectively. Among other major suppliers, Turkey performed well, with exports increasing by 30.3% in the first eight months, while clothing exports in India still increased by 36.5% in the first half of the year, while Vietnam's exports increased by 15.8% in the first eight months.

Trend Outlook 1: affected by last year's high base, it is expected that the growth rate of clothing export in the fourth quarter of this year will continue to "abate fever", but it will remain resilient

The international market demand recovery momentum is obvious, but the negative impact of high inflation threat on consumption can not be ignored. In August, the price index of personal consumption expenditure in the United States reached a new high since 1991. The European Union and Japan have repeatedly wavered in the "blockade" and "unsealing", and consumption has not yet returned to the level before the epidemic. Central bank governors of the United States, Europe, Japan and the United Kingdom warned at the end of September that worsening supply chain bottlenecks would lead to sustained high inflation.

The supply chain of other countries is gradually recovering, so the scale and sustainability of order backflow should be carefully studied and judged. After the release of Ho Chi Minh City, it has gradually returned to work and production. In early October, the rate of returning to work was nearly 90%, and the rate of staff rework was nearly 60%. Export orders of some enterprises have been received to the second quarter of next year.

Trend Outlook 2: while foreign demand recovers, the industry will face greater cost and capacity pressure

It is still difficult to fully ease the high sea freight charges and the shortage of transport capacity. The U.S. government recently asked the ports of long beach and Los Angeles to operate round the clock, which is expected to accelerate the operation of the congested supply chain, but the bottleneck is difficult to eliminate in a short time. On October 9, the Shanghai export container freight index failed to continue the previous correction trend, still rose to 4647.6 points, six times the last year's low.

The prices of cotton and other raw materials have risen irrationally from the supply and demand fundamentals, driving some intermediate products to follow the price hike, far exceeding the affordability of downstream enterprises and the market, resulting in serious squeeze on profits.

Tight energy supply and rising prices have become a common phenomenon, which has inhibited the production capacity of all links in the entire industrial chain. First, it is difficult to complete the order; second, the delivery date cannot be guaranteed; third, it has boosted the cost of various factors.

The RMB exchange rate remained strong and continued to reduce export profits. In the first three quarters, the average exchange rate of RMB increased by about 8% compared with the same period last year.

In the first eight months, the average unit price of woven and knitted garments increased by 9.1% and 7.5% respectively over the same period of last year, which shows the impact of cost increase on export prices. In the future, whether the cost can continue to be transferred to the price will be restricted by many factors.