The amount of debts is increasing, and goods are not shipped easily… the profit margin of foreign trade is being suppressed again!

As the market continues to roll back, the profits of foreign trade have been suppressed to a very low level. Recently, many “black swan” events have occurred, making the originally poor days even worse. Many textile workers said that they were confused by the shipping costs and exchange rates, and all the profits were gone. They dared not ship the goods, and they could not book ships if they wanted to ship them! The exchange rate plummeted. Under the impact of the strong US dollar, Asian currencies are experiencing an unprecedented depreciation storm. Whether it is the currencies of major Asian economies such as the Japanese yen, Indian rupee, and Korean won, or small currencies of ASEAN countries such as the Indonesian rupiah, Vietnamese dong, and Philippine peso, they have all encountered a new round of selling pressure. Some currencies have hit new lows in months or even in history. In addition to Asian currencies, the currencies of many countries in Europe, South America, Africa, etc. have also been depreciated to varying degrees. The minutes of the Federal Reserve’s monetary policy meeting in May released on the 22nd showed that due to disappointing inflation data and strong economic growth in the first quarter, it would take longer than expected to be convinced that inflation continued to ease. Officials at the meeting noted that the components of the prices of US goods and services have risen significantly recently, and the Federal Reserve has “lack of further progress” in achieving its long-term inflation target of 2%.If the inflation target is to be achieved, demand growth needs to slow. Despite this, Fed officials still believe that the current level of the federal funds rate is sufficient to curb US economic activity and reduce inflation, and that inflation is expected to return to the long-term target level of 2% in the future, suggesting that the Fed will continue to keep interest rates unchanged. Price increases began in late April this year, and it can be felt that freight rates to Latin America, Europe, North America, the Middle East, India and Pakistan have risen, and the increase in May was more obvious. Judging from the Shanghai Export Container Comprehensive Freight Index released by the Shanghai Shipping Exchange, the index has continued to rise since early April 2024. Data released on May 10 showed that the Shanghai Export Container Comprehensive Freight Index was 2305.79 points, up 18.8% from the previous week, up 33.21% from 1730.98 points on March 29, and up 132.16% from November 2023 before the Red Sea crisis broke out. Among them, the South American and European routes had the highest increases.The freight rate (sea freight and sea freight surcharge) from Shanghai Port to the basic port market in South America is US$5,461/TEU (container with a length of 20 feet, also known as a standard container), up 18.1% from the previous period and up 95.88% from the end of March. The freight rate (sea freight and sea freight surcharge) from Shanghai Port to the basic port market in Europe is US$2,869/TEU, up 24.7% from the previous week, up 43.88% from the end of March, and up 305.8% from November 2023. Data released by shipping research and consulting firm Drewry on May 10 also showed that the Drewry World Container Index (WCI) rose to US$3,159/FEU (container with a length of 40 feet) as of May 9, up 81% from the same period in 2022 and up 305.8% from 201

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