Having now reached the first quarter of 2006, European Union quota fill rates of imported Chinese apparel and textile are still considerably short of exhaustion. Indicators of future imports signal that no immediate rebound is likely but this could see EU retailers being encouraged back to former Chinese suppliers.
We are already one quarter the way through the year and EU-China quotas still show no signs of heading towards exhaustion.
Categories are far short of the 25 per cent fill rate figure which would indicate possible full quota use by the end of 2006.
The biggest filler so far is category 115 (flax yarns) at 17 per cent.
Lowest quota users are categories 5 (pullovers) and 6 (trousers) at just under 5.6 and 10 per cent respectively.
Quota use to remain low in short term
This is not surprising given how EU retailers last year were on the receiving end of the fiasco that saw products being embargoed just weeks after the deal with China was struck.
Goods that have been licensed in China for export indicate what is heading Europe's way in the next few weeks.
Textile goods are leading the charge with category 115 and 2 (cotton fabrics) at 30 and 22 per cent respectively.
This, however, does not see any substantial weekly growth in export licence use.
This low rate is therefore reflective of how orders were placed elsewhere with suppliers in Bangladesh for example.
As the fill rates are only slowly filling, the months ahead could signal a calmer approach from retailers possibly returning to former Chinese suppliers.
Prices again dip
However, that would also depend on whether prices are still attractive.
Sensitive categories have also seen a rise in unit values as the cost of exporting under the quota system increases.
Export licences continue to be sold for less in China with lower demand, however.
Category 5 (pullovers) for example, with only a small use of quotas, has seen prices for quotas drop from US$14 per dozen at the start of March to $12.20.
