How to avoid exchange rate risk in toy exports
In an interview with toy companies, we learned that the renminbi has appreciated slowly over the past year, which has had a certain impact on the export-oriented toy industry. How can toy manufacturers reduce the economic losses caused by the appreciation of the renminbi? Fang Hengxiang, general manager of Guangdong Nanhai Xinzhong Toys Co., Ltd. said that since the appreciation of the renminbi is not very large, the prices of enterprise products have not increased significantly. We have adjusted according to the price of different varieties, and there are rises and falls, but the overall The profit has decreased. He believes that the RMB exchange rate may be better in one step, so that the price of export products can be set according to the exchange rate, and the slow rise makes the company in a state of helplessness. Xie Paichang, general manager of Guangdong Dishijia Industrial Co., Ltd. also said that in the past year, the toy export business has not been affected by the appreciation of the renminbi. This factor can be completely digested within the enterprise, and the export price of toy products has not been changed due to exchange rate changes. Adjustment. Product prices are mainly adjusted based on changes in product costs such as labor prices and water and electricity prices. The main problem at present is that the EU's green trade barriers such as the RoHS directive have a greater impact. When talking about whether to use the bank's exchange rate hedging instruments such as the mid-term and long-term foreign exchange settlement and sales business, Xie Zong said that the company's current exports are all on-the-spot. If the renminbi continues to appreciate, some measures will be considered, but it will depend on the circumstances. On the issue of the impact of the continued appreciation of the renminbi on the foreign trade industry, Li Yushi, vice president of the Trade Research Institute of the Ministry of Commerce, said that the appreciation of the renminbi has had a major impact on industries with high export-oriented and high-value foreign currency assets, especially some low added value. Low-profit export industry. With the increase in the flexibility of the RMB exchange rate, the volatility of the RMB exchange rate will become larger, which will bring unpredictable effects to foreign trade enterprises to a certain extent. Multiple measures to avoid risks "Under the trend of the volatility of the renminbi, the top priority for Chinese exporters is to get rid of their dependence on the money market as soon as possible and increase their competitive advantages in addition to price competition." An authoritative financial planner in the banking industry analyzed and pointed out. He said that foreign trade enterprises can apply to banks by signing short-term contracts, adopting multiple pricing currencies or signing contracts directly in RMB, negotiating the use of fixed exchange rate to lock costs, flexibly using international trade settlement methods, handling trade financing or credit business, and applying to banks. Handling the letter of guarantee business, handling forward settlement business, handling RMB and foreign currency swap business, and actively adopting foreign exchange wealth management tools to avoid the risk of foreign exchange collection. In particular, he pointed out that in signing contracts, enterprises should try to sign short-term contracts to avoid risks; if they have to sign long-term contracts, they should consider the appreciation of the RMB in terms of pricing, and attach the impact of exchange rate changes to the export trade contracts. Take the exchange rate hedging channels available by banks and the flexible use of international trade settlement methods as an example. At present, the bank has two kinds of exchange rate hedging instruments. One is the medium-and long-term foreign exchange settlement and sales business. The client signs a forward settlement and sale contract with the bank, and handles the settlement or sale at a certain time in the future according to the agreed currency, amount and price. The exchange business; the second is the foreign currency against the RMB swap business. Both types of business can help companies avoid risks. However, according to the statistics of the People's Bank of China, the current total turnover of the RMB forward market accounts for less than 2% of the total trade volume, which means that many foreign exchange positions of import and export enterprises have not hedged, allowing exchange rate fluctuations. The financial situation of the company. And in some toy companies we know, this is basically the case. Enterprises should also flexibly use international trade settlement methods to collect or postpone foreign exchange payments in advance. When the RMB is expected to appreciate, the importing enterprises should delay the payment of foreign exchange as much as possible. The exporting enterprises should collect the foreign exchange as soon as possible and use the credit card settlement as much as possible. If the letter of credit is used for settlement, the import can use the forward letter of credit, and the export should use the sight letter of credit as much as possible. Some business leaders also said that although they can transfer some exchange rate risks in cooperation with banks, the current price of hedging instruments provided by banks is too high for enterprises to bear. Microfiber Pu Cloth,Microfiber Leather,Microfiber Pu,Microfiber Faux Leather NINGBO JINMAO IMPORT&EXPORT CO.,LTD. , https://www.webrightsource.com