In the earlier year it had posted a much higher growth rate of 35.39 per cent when its production rose to 667,899 tonnes from 493,287 tonnes in 1996-97. But for the slow- down experienced by the textile industry, the polyester filament yarn industry could have achieved a much better growth rate in 1998-99.

Actually, the polyester staple fibre industry achieved in 1998-99 a much higher growth rate of 20.22 per cent in 1998-99 when its output touched 527,303 tonnes (P) compared with 438,616 tonnes in the earlier year. It might be interesting to note that this industry was able to achieve a muchhigher growth rate of nearly 35.07 per cent in 1997-98 with its production rising to 438,616 tonnes from 324,729 tonnes in 1996-97. The polyester fibre industry was able to make considerable encroachment on the domain of cotton during 1998-99 as it prices fell below those for the natural fibre.

In the wake of financial crisis in some East Asian countries, there was cut-throat competition in the international markets for polyester. Foreign suppliers started slashing their prices. This affected domestic producers as well. They had little option but to prune their prices to resist imports. Gradually domestic prices fell as low as Rs 40.50 per kg or even lower (ex-factory). Since polyester staple fibre thus became cheaper, textile mills increased their consumption of polyester staple fibre. Since the beginning of 1999-2000, prices of polyester staple fibre have started going up. Their impact, if any, will be felt in the current year. Exports of both polyester filament yarn and polyester staple fibre from thecountry were badly affected in 1998-99.

Industry sources point out that 1998-99 was a very disappointing year from the point of polyester fibre exports. Competition was so severe abroad that India had to withdraw from export markets in December 1998. There were no shipments even during the subsequent two months.

The industry re-entered the market in March 1999 with shipments of just 428 tonnes. This was, however, too small a quantity compared with 2066 tonnes in the same month a year ago.

The overall decline in India's polyester staple fibre in 1998-99 can be seen from the fact they amounted to just 2291 tonnes valued at US$1.87 million, compared with 11,288 tonnes worth US$ 11.31 million in the earlier year, reflecting a perpendicular drop 79.70 per cent in quantity and 83.47 per cent in value.

Shipments of polyester fibre in April 1999 have been lower at just 964 tonnes worth US$0.56 million compared with 1453 tonnes valued at US$1.47 million in the same month of the earlier year. Exports ofpolyester filament yarn, POY and texturised yarn taken together, also came down in 1998-99 to 36,529 tonnes valued at US$51.39 million compared with 46,106 tonnes worth US$79.83 million tonnes in the earlier year, showing a fall of 20.77 per cent in quantity and 35.63 per cent in value terms. The overseas markets still remain difficult.