May 12, 2021

Steady imports seen in second-half 2014 [Survey]

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Importing2From Global Sources

Many volume buyers expect level business in the months ahead, results of Global Sources’ latest buyer survey reveal. More than 1,300 importers participated in the survey, which focused on second-half 2014 projections.

Over 60 percent of surveyed buyers said their import volumes will increase in the next six months. Projections are less optimistic than a similar survey published in February 2014 forecasting imports for the first half of 2014. Seventy-four percent of respondents in that survey indicated their imports would increase.

Meanwhile, 28 percent of buyers indicated imports will remain unchanged, affirming the air of moderation within the volume buyer community, which continues to face pricing, quality and end-market demand issues.

Only 10 percent of respondents said their import volume will decrease.

For respondents planning to increase import volume in second-half 2014, prudence is likewise the name of the game. Many estimate purchases to climb 10 to 20 percent while a substantial number estimate less than 10 percent growth.

Nevertheless, massive expansion should not be dismissed. One-fifth of buyers in this subgroup said they plan to boost imports by at least 30 percent.

As for sourcing hubs, buyers continue to favor China, despite its evolving manufacturing nature, over other locations.

The survey allowed respondents to pick out their country sources for the past 12 months and close to 80 percent said they they had business transactions with suppliers in mainland China and Hong Kong. Southeast Asia is a far second with 20 percent. Taiwan followed with 19 percent.

Participants were also asked about mainland importing plans for July to December 2014 and 60 percent said they will boost purchases there. Thirty percent will keep business at current levels and the rest will cut down mainland imports.

Rising quotes of China-made products remains the biggest challenge among importers although buyers are becoming increasingly savvy in dealing with such price increases.

In an Import from China Advice article, Renaud Anjoran gave a few tips on negotiating with China factories for slower price increases, including focusing price discussions around hard data such as cost breakdowns. Anjoran has been managing his QA agency Sofeast Ltd since 2006.

Foreign exchange rates-related issues rank second in the survey’s challenges list.

The yuan, for example, is generally perceived to be undervalued against the US dollar. Elvis Picardo wrote on Investopedia that different studies suggest “a wide range of undervaluation—from as low as 3% to as high as 50%.” For US buyers importing from China, however, an undervalued yuan results in competitively priced products.

The yuan is pegged to the greenback based on a daily reference rate from the People’s Bank of China and is allowed to fluctuate only within a fixed range. Signs are pointing to a relaxation of currency control, though. China banks can now set their own yuan-US dollar exchange rates in over-the-counter transactions. Wholesale transactions, however, still have to follow the midpoint guidance rate.

Survey profile

The survey was conducted among 1,364 respondents. When classified according to nature of business, 19 percent of participants are direct importers. Exporters provided answers as well. The third-biggest group consists of trading companies that provide a range of sourcing services.

Many respondents said they source for clients in Asia. North America and Western Europe are the tied as the second-biggest importing regions in the survey.

Participants hold high- to midlevel positions in their corporations. The biggest group, representing 34 percent of the respondent base, consists of owners, partners, presidents and managing directors. Purchasing managers and buyers form 24 percent.

For more on this story go to: http://www.globalsources.com/NEWS/Steady-imports-secondhalf2014-survey-071114.HTM?WT.mc_id=4009084

IMAGE: www.prizedimports.com

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