Both PSF and PFY exports are rapidly falling by each month. PSF exports, which were of the order of 2066 tonnes in March 1998, collapsed in July to just 216 tonnes. Likewise PFY exports had come down during the period from 8802 tonnes to just 2260 tonnes. According to sources in the industry, overseas buyers are not inclined to open LCs for fresh business as they see the prices dropping further.

Domestic producers are to be satisfied with whatever they can sell in the local market. The sharp fall in international prices has, however, made it difficult for them to revise their prices upward. Their exfactory prices are about Rs 43 per kg for PSF and about Rs 43 per kg for PFY. If PSF strangely commands a little higher price in the domestic market, it is because of better demand. However,manufacturers have no inventories at present but stocks of PFY are slowly drying up.

The trouble began with the Asian countries, which are currently undergoing financial crisis, started flooding the markets with their products and selling at prices much below the market levels.

Last month, Taiwan slashed its polyester staple fibre (PSF) prices to just $0.60 per kg (cif). Now even Thailand, Indonesia and South Korea are said to have pruned their prices to stay firm in the international markets.

On the other hand importers like China has stopped imports to a great extent. It is not known whether it has already covered its requirements for the current year or has done so expecting further price cuts.

Shortage of demand from abroad has affected the US markets as well. Inventories are mounting as manufacturers of polyester are increasingly opting for drastic cuts in their production. Moreover, they are facing stiff competition from cheap imports.

Exports from Asia, particularly of texturised polyesteryarn, have started causing concern even to manufacturers in western Europe. According to overseas observers any improvement in the situation is unlikely atleast until next year.

Fresh business has become extremely difficult for polyester exporters from India. They are alarmed at the sharp fall in despatches in recent months.