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Manufacturers, Exporters, Wholesalers - Global trade starts here.

Textile Firms Bid for US Export Quotas

On Tuesday, bidding started for 2006 US export quotas for 21 categories of textile products, with about 28,296 Chinese textile companies making their bids.

This is the first public bidding process for US export quotas since China and the US reached a textiles agreement in early November.

Guangdong, Zhejiang, Jiangsu and Shandong provinces, and Shanghai Municipality are five major textile manufacturing bases in China. Of the textile companies that qualify for the bidding process, these five have a total of about 22,000 or 80 percent. In Guangdong alone, 7,500 companies are participating in the bidding.

The bidding, organized by the Bidding Office under the China Chamber of Commerce for Import & Export of Textiles (CCCT), will last for three days. Results will be released on Friday morning.

According to the management rule set by the Ministry of Commerce (MOFCOM), 70 percent of next year's total export quota, which was decided in the Sino-US textile agreement, is determined by the ministry based on this year's export volumes generated by the respective companies. The remaining 30 percent will be auctioned off through the bidding process.

Tuesday's bid process only accounts for 60 percent of the bid quotas on offer.

In order to help those who have never bid for a quota before, the CCCT Bidding Office arranged a simulated bidding prior to Tuesday. Officials of the association also advised companies to submit their bids as early as possible to avoid unforeseen delays such as network jams.

The current bidding mechanism was implemented three months ago for EU export quota bids in 10 categories of textile products.

However, many producers feel uneasy. "We made bids for quotas of some EU-bound products in the past, but this is the first time that bids are being made for US-bound quotas," said Mao Xiahua, an office director of Shanghai Flying Horse Import and Export Company.

In Shanghai alone, the number of bidders this time is 900 more than the previous EU quota bid.

"We will decide how much we need according to our orders," Mao said, adding: "The bidding prices, much higher than previously, should be shared with foreign clients."

According to Mao, the quotas allocated by MOFCOM do not come close to the company's production capacity.

"We will apply for the maximum volume in as many categories as possible," Mao added.

Last week, MOFCOM released allocated quota results. About 20,485 companies received a variety of quotas starting from a minimum allocation volume of 20 dozen packages or 200 kilograms.

According to the analysis of webtextiles.com, the five major manufacturing bases took 84.35 percent of the total allocation volume. Among them, companies from Zhejiang Province won 25.05 percent, Guangdong 21.66 percent, Jiangsu 19.03 percent, Shanghai 12.15 percent and Shandong 6.46 percent.

(China.org.cn by Tang Fuchun, December 7, 2005)

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