China Watch Blog has learnt that the Christmas season is quickly approaching, and China’s exporters are like elves busy making holiday gifts to be transported and sold worldwide. But while large volumes of orders usually bring happiness in profits, this year, it’s bringing on headaches instead.
Most years, Chinese manufactures have looked forward to the holiday season with cheer. But this year may be different.
In the eastern Chinese city of Ningbo, a hub for export goods, factories are feeling more towards incoming orders from overseas. Their production prices are rising thanks to the soaring costs of raw materials, People’s Daily reported.
Xiang Bobo, Manager of Chinese Exporter said “Material prices are rising so fast, they differ each day. That makes it impossible for us to price our product appropriately, and we have had to turn down many orders.”
Production prices are normally fixed several months in advance. So overseas buyers are unhappy when they have to pay for the slack. It has left many exporters unwilling to take large orders.
Zhang Yongda, Manager of Chinese Exporter said “Since prices cannot be changed, and uncertainties still abound in the raw material market, exporters are afraid of bigger orders, as they also mean bigger risks.”
For the manufacturers who have taken such orders, they are struggling for profits. And for many, this is shaping up to be a busy season, but not necessarily a profitable one.