Such excessive premiums, which were once available on sale of quotas have disappeared, as quota markets in Europe have become dull. Also it is becoming increasingly difficult to sustain exports of cotton yarn to European countries as some aggressive competitors have entered these markets making life difficult for Indian exporters who quite often suffer not only from the angle of price but also from that of quality and often from that of delivery.

This transfers of past performance quotas at hefty premiums have been a thing of the past.However, instead of doing away with the practice of inviting applications every quarter for the allocations of quotas under the ready goods scheme the authorities continue to follow that practice which has become useless.

When applications for the current quarter were invited last month the response from export community was very poor. This can be seen from the fact that while the quantity available for allocations under the scheme was about 57.37 lakh kg. Actual applications received by the authorities were just for 27.5 lakh kg. Thus there were no takers for nearly half of the quantity available for allocations in the current quarter. Any one can now apply for allocations from this balance quantity.

This situation indirectly implies that chances for revival of premium on past performance quotas are nil at present. For those who have export enquiries, but do not have requisite export quotas for the purpose can immediately approach the authorities to get export allocations from the ready goods quota remaining unutilised.

Conditions for business with the European countries are far from encouraging at present, because new strong competitors have entered this field. The overall quota for exports of cotton yarn to European countries from India in 2000 has been fixed at 40,981 tonnes and though quantitatively this quota may be ultimately utilised, price realisations remain unsatisfactory. Even in the previous year some of the exporters were seen running here and there at the fag end of the year to utilise their quota even without profit or even at some losses in order to maintain their performance entitlement.

Similar situations may be repeated even this year, looking to fierce competition, and reduced demand in European markets. Particularly, Uzbekistan has emerged as the strongest competitor price-wise. Another strong competitor in Turkey which stands at the doorstep of Europe.Its exporters thus have advantage of effecting quick delivery. Also they have the advantage of lower transport costs because of small distance between Turkey and Europe. Among other competitors are some Baltic countries as well as Russia. As supplies are many and all of them are competing among themselves to capture whatever business they can, buyers are reluctant to purchase more than what they require immediately. They are unwilling to maintain inventories. In view of competition, prices are seeking lower and lower levels.