In the first quarter of 1998-99, for instance, shipments of PSF have fallen to 1219.75 tonnes from 3075.41 tonnes registered during the same period last year. This shows an alarming decline of 60.33 per cent in volumes. Likewise in terms of value, exports dwindled during the period by 57.35 per cent to $1.19 million from $2.79 million.

According to sources in the industry, the average export price fetched by Indian PSF in the first quarter of 1998-99 was around 97.5 US cents per kg. The international prices have fallen further since then because of the cutthroat competition resorted to by countries like Thailand, Indonesia, Taiwan and South Korea.

As a sequel, PSF is being offered in the overseas markets around 60-70 US cents (Rs 25.80 -30.10) per kg. Unless the Indian exporters can match these reduced international prices, they are sure to be driven out of the overseas marketsgradually.

The domestic price for PSF remains around Rs 40.41 per kg but in order to attract buyers, most manufacturers are reported to be offering discounts to the extent of Rs two to five per kg on their ex-factory prices.

PSF production has rapidly expanded in the country in the last two years, as fresh capacity was commissioned during the period. This is evident from the fact that the domestic output which stood at 2.28 lakh tonnes in 1995-96 jumped to nearly 3.25 lakh tonnes in 1996-97 and soared to 4.45 lakh tonnes in 1997-98. In other words production has nearly doubled in the last two years. In this situation indigenous producers were naturally inclined to sell a part of their production abroad in order to reduce the pressure of increased supply on the domestic market.

It may be an uphill task now to sell profitably in the overseas markets. Unless the domestic demand goes up to absorb the increase in supply, the producers might be forced to keep down production. The PSF sector has set upcapacity of about 6.00 lakh tonnes per annum. The PFY exports have also started falling rapidly after reaching the peak of about 8800 tonnes in March last. They plummeted to about 3780 tonnes in June'98 and the trend remained downward.

The texturising units are facing the worst plight. The exports have crashed following the thoughtless reduction in the DEPB entitlement to 14 per cent from 20 per cent and stiffer competition in the overseas markets.

International prices for this yarn have come down to about $1.10 from about $1.37 per kg (C&F) indicating a fall of about 18.5 per cent. This has made exports an an unworkable proposition. No doubt some shipments are taking place against past commitments but fresh transactions are dwindling.

In the domestic market, prices of D80 texturised yarn have fallen from about Rs 95 per kg to Rs 82-85 per kg forcing the closure of nearly 70-80 out of about 200 units in the Silvassa region.