*** Appreciation swallowed half profit Profits of Anhui export textile companies suffered the most

On April 29, the middle price of *** against the US dollar was 1 US dollar to ***6.4990 yuan, an increase of 61 basis points over the previous trading day, breaking the 6.5 mark, and creating a new high since the exchange reform. Yesterday, the exchange rate of *** against the U.S. dollar remained below 6.5. The reporter learned yesterday that the pace of appreciation has accelerated the impact on export enterprises in Anhui Province, and some of the companies reported that the appreciation of *** resulted in half the loss of profits.

Export list became "hot potato"

"This year's list has a lot, but I can't afford to pick it up." Mr. Yang has been exporting porcelain for six to seven years. He just participated in the Spring Fair and returned to Hefei in advance. "In less than half a year's time, the *** has appreciated by 2%, and profits have also been lost by more than half."

Since April of this year, the exchange rate of *** against the US dollar has successively broken through the 6.55, 6.54, 6.53, 6.52, 6.51, 6.506, and 6.5 mark. Since the *** was delinked from the US dollar on June 19 last year, the The dollar has appreciated by 4.96% in more than 10 months. Coupled with the rising prices of raw materials and labor in the manufacturing industry, manufacturing export enterprises in our province have felt pressure.

Mr. Yang said, "As we do trade, gross profit is generally 5% to 6%, but after the Spring Festival, now, in less than three months, the appreciation of the *** has swallowed at least 2% to 3% of the profit."

“For the export enterprises in Anhui, the textile factory has been the hardest hit.” Mr. Wu, the provincial capital’s clothing exporter, told reporters, “If *** continues to appreciate this way, some factories are expected to close down in the second half of the year.”

Turning to domestic sales is facing difficulties, accelerating appreciation, coupled with rising prices of raw materials and labor, making many export companies in Anhui Province face the dilemma of “no money to earn”. During the interview, the reporter found that at present, some export enterprises in our province began to brewing and turning to domestic sales, but faced with many difficulties.

"Now the export competition is so fierce, we are not willing to arbitrarily raise the price." Mr. Yang reluctantly stated that from past experience, foreign buyers can accept less than 50% price increase.

“Some of my cooperative factories now have plans to switch to domestic sales, but face many difficulties.” CEO Zhang Bao of Hefei Zhiyuan Planning Agency stated that many export enterprises in our province lacked domestic sales personnel and experience due to the long-term focus on import and export trade. It is difficult to establish a mature sales network, and the establishment of a domestic sales network also requires substantial investment of funds. He suggested that relevant departments should issue relevant support policies to encourage exports to domestic sales as soon as possible.