Samples & Brochures

renmingbi

John,

As I pack for my trip to Asia (part vacation, part visit to vendors in
China to discuss product design), I think about my gnawing concern about
the renmingbi, aka "soon to be cheaper Chinese currency". As per the bible
according to Spiers, the importer assumes exchange risk. Facing the
possibility of such a devaluation occurring sometime between me agreeing to
a price for my lamps with a vendor (a moderately distant event) and my
sales reps collecting 1000 orders (a yet even more distant event!), what
are my alternatives?

Is it reasonable that if such an event occurs, I simply notify my reps of a
price increase, and hope that not too many have been ordered?

Raise price on already-ordered items?

Risk eternal damnation and try to negotiate price in RMB?

And/or do you think that I should consider purchasing a currency contract
(I'm looking at perhaps 25K - 50K USD FOB value for first shipment)?

As always thank you endlessly for your guidance and I am happy to report
that your process has been validated every step of the way.

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