Many Chinese companies now are worried about whether the products ’price should be increased. One company's flagship products are apple extracts and other health supplements. There are mainly exported to Europe and the United States and other foreign markets. However, the company is currently subject to export foreign exchange and the rising costs flank. The company wants to raise prices, but the industry is difficult to reach an agreement.

There are many pharmaceutical raw materials suppliers distress about the problems. It is nearly 29,000 manufactures engaged in the business. Since June last year, the RMB against the U.S. dollar to nearly 3 percent, close to the critical point of these enterprises can withstand. In addition to the loss on the exchange rate settlement, the company is also affected by the troubles of rising raw materials. Inflationary impact of China's agricultural and resource products, prices continued to raise, a tremendous impact on plant extracts. The consumption of alcohol and other raw materials prices, the company in the third quarter of this year compared to last year, the main product apple extract the direct cost of production per kilogram, an increase of 50 RMB. Hopes on cost control to reduce the loss of exchange settlement, profit margins have been dramatically compressed.

Some of the company's customers are mainly concentrated in the United States and Europe, the euro-zone countries. Foreign contract settlement currency is U.S. dollars, so this is from late June 2010; the appreciation of Chinese currency has a great impact on the company's export earnings. Change the settlement currency, because the customer is the main gathering area, only to make a choice between the dollar and the euro, the euro is due to exchange rate fluctuations, you need to have a more accurate judgment on the trend of the euro, while master exchange best time. The current foreign exchange management system provides resveratrol enterprise exchange settlement must have proof of payment, the number of how many knots, which makes the company can not control the exchange rate losses.

In order to avoid losses, there are many ways, the simplest such as price increases. However, a large number of plant extracts manufacturers in China does not have a form of foreign price-fixing cartel industry associations, enterprises in export sales to fighting each other to keep the prices down sales, rather than forming together to raise export prices, so contradictory and turned to the manufacturers between the produce. Derivative transactions are forward foreign exchange, forward exchange settlement and sales are higher, and the accuracy of the enterprise to determine the exchange rate and the rates are not cheap. It is difficult for SMEs.

Average profit of Chinese medicine and health export-oriented pharmaceutical raw materials enterprises is not so high. It is only 2-3%. Sino-US exchange rate war’s mainly affects the foreign trade SMEs. If the RMB against the U.S. dollar increases again, the business has essentially no ability to conduct a cost digestion. Chinese medicine export enterprises may directly facing losses. In order to change the passive situation on both sides by the attack, many companies now are looking for ways to reduce costs through the development of new production processes to improve product yield, reasonable arrangement working hours to improve labor productivity and tap their own potential.Source:http://www.cospcn.com