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Garment quota: Premium on fast moving items declines

Our Bureau

COIMBATORE, April 12

SEVERAL garment categories/items whose quotas were opened on April 10 for allotment under the `ready goods' entitlement for the US, EU and Canadian markets went abegging, with considerable quantities remaining unutilised at the end of the quota opening d ay.

Only select categories of fast moving items for export to the EU and Canadian markets could pick up the entire quantity allotted under the ready goods category on the opening day itself. These items also managed to attract the `cut-off' prices, indicatin g that the offer from exporters of these items far exceeded the demand.

According to industry sources, even in cases where the specific fast moving items could fully cover the allotted quantities and attract cut-off prices, the premium on the quotas have fallen considerably.

According to sources, in the case of category no. 4 for the EU market (knitted T-shirt), which is a fast moving item as for the Tirupur market is concerned, the premium on the quota has fallen by 60 per cent, though it has attracted a cut-off price at $1 .95 apiece.

Similarly, in category No. 338/339 (ladies T-shirt) for the US market, the cut-off price fixed was $7.93 apiece (for adults) and $6.30 (for children) respectively.

There has been a drop of over 45 per cent in the premium rate for these quotas this time.

The release of additional quantities under the `flexibility' quota arrangement as well as the normal increase in the annual level of quota entitlements for the EU and the US/Canadian markets is said to be a major factor responsible for the drop in the pr emia on several categories.

The additional quantities thus made available have pushed up the total availability of quotas by over 10 per cent this time under the FCFS category for the second quarter exports.

Besides the general slide in demand in the EU/US markets, quite a few garment categories becoming non-restrained items from 2002 calendar year onwards has also contributed to the tapering off of interest among the garment exporters.