Wenzhou Firms Wins Orders of Intent Worth USD 269 Million at the 108th Canton Fair

wenzhou wins orders of intent worth USD 269 million at the 108th canton fair

The 108th Canton Fair dropped the curtain yesterday where 620 exhibitors from Wenzhou firms won orders of intent worth USD 269 million, a 5% increase over the last fair. However, the rise in the cost of raw materials, the difficulty in recruitment as well as the exchange rate war have cast shadows upon the prospect of international trade.

Xia Linhong, director of the Foreign Trade Division under the Bureau of Foreign Trade and Economic Cooperation of Wenzhou showed her concerns. Due to the rise in the cost of raw materials and a stronger Renminbi etc, the quotes are generally raised by about 10%, which has resulted in the growth of the total contract value. Hence, a reduced profit is hiding behind the harvest of orders.

The rocketing of the cotton price has laid a heavy burden on textile and clothing factories. “The daily changing price of cotton has made us at a loss when quoting.” Said by Lin Jiejing, the saleswoman at Wenzhou Tengxu Clothing. Although the quotes have risen by 20%, the export price of clothing still can not catch up with the rising pace of raw materials. According to clothing factories at the fair, not only cotton, but also chemical fiber and polyester etc are facing a rise in the price. What’s worse, a stronger Renminbi has made export a difficult business. Lin added, “Our price is a real-time quote which is only valid within 7 days. After that, the quote will be adjusted.” At present, quotation valid for 7 days has been a common practice for textile and clothing factories. However, such quotation makes orders unstable and buyers can turn to other suppliers at any time.  

Compared with clothing factories burdened with the rise of cotton price, shoes factories are more optimistic. Juyi Group, a big shoes supplier from Wenzhou, gained more orders of intent than the last fair, increasing by 15%, which surprised Deng Yunshou a bit, the international trade manager at Juyi. He said that those summer shoes like sandals are more popular at previous autumn Canton fairs, but this time they got more than USD 100 million orders of boots. Deng guessed that their buyers wanted to confirm the quotation earlier for the worry of a much stronger Renminbi in the next year.


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