Fast rise in China's license use
EU-China Quota Fill Rates and Prices
25 January 2006 - China's licence use for apparel and textile exports to EU markets has got off to a rapid start with some categories already using 10 per cent of their allocation for 2006. Goods still have yet to arrive in EU ports, but in the coming weeks and months could prove to a be a problem for Chinese licence regulating. This is the first of a new series of weekly reports covering EU Quota prices and fill rates.
Just four weeks into 2006 and the amounts of export licences used in China have already reached double figures for certain categories such as Bed Linen and bras.
Fill rates will speed up
Imports arriving at EU ports for the year to 25 January are still quite low by comparison given transportation times but should start to speed up in the coming weeks as licence use in China climbs higher.
Category 20 (Bed linen) has already used 11 per cent of its allocated export licences for the year with categories such as brassieres (31) and t-shirts (4) already closing in on 10 per cent.
Flax yarns (Category 115) have used up 9.6 per cent of export licences but only 0.01 per cent has so far arrived in Europe.
This is an early warning sign to importers and Chinese authorities who will need to manage a balanced output for the year if they are to avoid early embargoes.
If embargoes are avoided, it will be because the rhythm of exports has slowed down.The right question is whether China is able to absorb the difference or whether it will be passed onto the customer.
Watch this space!
We will monitor the situation in this new weekly report bringing you the latest in China quota fill rates and prices.
