Half-way through the year and European quotas on China's shipments are increasingly drifting further away from any possible exhaustion, latest data reveal. The growth of quota use over the past four weeks has slowed down although export licences for these categories issued in China show a modest rise in the four-week period ending 28 June.

Having now reached the half-way point in 2006, European quotas for the 10 restricted Chinese categories are nowhere near the 50 per cent needed to indicate possible exhaustion before the end of the year.

In fact, several categories are even struggling to arrive at one-quarter usage as other Asian producers, especially Bangladesh, Vietnam and Indonesia pick up extra orders.

Only one exception

There is one exception however: category 115 (flax yarns) is the biggest quota consumer at 52.46 per cent and could possibly hit 100 per cent at current rhythms.

But the next largest user, category 2 (cotton fabrics) is way behind on 31.25 per cent while category 7 (blouses),the biggest of the apparel quota users, is on just 29.79 per cent.

Licence use improves slightly

The fill rate growth - the amount of quotas used from four-weeks ago - has largely dropped for most categories.

Category 39 (woven table linen) has grown by just 2.78 per cent, for instance.

But export licences issued in China suggest that there could be a modest improvement in shipments shortly to arrive in European ports.

Licence use for Category 4 (knit shirts/T-shirts) had risen by 5.63 per cent in the four week period ending 31 28 June while category 5 (pullovers) were up 12.35 per cent.