Devaluation Of Supply Countries Leads To A Decline In Global Clothing And Footwear Consumption

Global

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Consumer spending is estimated to fall by 1.5% in dollar terms in 2015, the lowest level since 2011. According to a new report, the decline is mainly due to the depreciation of some major suppliers.

The devaluation of the US dollar makes these dollar denominated countries cheaper to export, which makes suppliers in these sourcing countries continue to be competitive.

For example, in mainland China, the value of RMB against the US dollar continued to appreciate between June 2005 and October 2014, and it has depreciated by 4% from October 2014 to October 2015.

Therefore, buyers from mainland China want to reduce prices through negotiation.

Chinese manufacturers also have to lower prices to maintain competitiveness with their counterparts in Vietnam, because Vietnamese products receive preferential tariffs under the forthcoming p Pacific Partnership Agreement (TPP) to enter the US market.

In India, the rupee depreciated by 13% against the US dollar in 2012 and 2014.

In the first nine months of 2015, compared with the same period last year, it dropped by 4%, the lowest in history.

The depreciation of the rupee has made the India products priced in US dollars cheaper and therefore more attractive to foreign buyers.

In Turkey, lira depreciated by 13% against the US dollar in 2014.

In the first nine months of 2015, compared with the same period last year, it dropped by 19%, the lowest record.

However, most of Turkey's clothing exports to the European Union, but most of these pactions are denominated in euros rather than dollars.

In 2014, lira depreciated against the euro at the same speed as the US dollar.

But compared with the same period of the previous year, in the first nine months of 2015, only 1% depreciated against the euro.

Therefore, the price of lira has slightly changed against the euro. During the nine months, Turkey's competitiveness has not improved in the European market.

In addition, imports of garment production in Turkey are also used.

Most of the supply comes from Asia - and most of the pactions are denominated in US dollars.

As a result, the depreciation of the Lila against the US dollar has led to a sharp rise in the cost of importing cloth in Turkey because of the US dollar valuation, which has affected the profitability of Turkey garment manufacturers.

On a more positive note, the euro zone depreciated by 18% against the US dollar in the first nine months of 2015.

Therefore, Turkey exporters believe that this will improve their sales in Europe in 2016, and hope to buy Turkey products in euros to save money, rather than buying products in US dollars denominated in Asia.

Exchange rate fluctuations in the first half of 2015 are one of the factors that affect the global economy.

Other factors include slowing demand for imports from China and other emerging markets, as well as falling prices of oil and other commodities, including cotton.

In addition, the growth of commodity trade in the coming months will be hampered by a significant slowdown in the economic growth of the developing countries than expected, such as the possibility of rising interest rates in the US and the unexpected cost associated with the European immigration crisis.

However, clothing and footwear consumption expenditure is expected to increase again in 2016 and accelerate between 2017 and 2019.

This will lead to a rise in global garment trading.

In most cases in 2015, low oil prices and raw material prices helped to boost trade.

By 2016, low prices of raw materials will be filtered through supply chains, which may lead to a fall in unit prices.