Industry sources point out that the target for exports of cotton yarn and sewing threads in the current year was earlier fixed at $1700 million.

However, it was later brought down to $1600 million in view of the recession and the downtrend in shipments.

In 1997-98, actual exports were in the region of $1577.63 million against a target of $1700. Doubts are being cast on the extent and success of exports this year. Whether the exports this year can emulate atleast last year's performance is anybody's guess. There was no South east Asian financial crisis during the first quarter of 1997-98. Still, there were pending orders for the subsequent few months. However, the impact of currency crisis in some of the Asian countries is being felt this year.

During the first four months of the current year, shipments have been only of the order of 151.43 million kg, against 174.55million kg in the same period of last year, indicating a drop of about 13.25 per cent. However, in value terms, the decline has been as much as 26.19 per cent to $456.68 million from $576.32 million.

Clearly, it may be an uphill task to push up total exports for the year beyond $1100-1200 million unless there is sudden economic recovery in those countries which used to absorb nearly 50 per cent of Indian exports. Of course, exports of cotton yarn and sewing threads from the country in July 1998-99 have been higher at around 40.50 million kg compared with 36.68 million kg in the previous month. However, exporters are not inclined to accept this as a change in the on-going trend. They argue that sometimes shipments fluctuate in certain months owing to availability or otherwise of shipping facilities in a particular month.

Moreover, exports totalling 40.59 million kg in July 1998 are lower than 43.25 million kg in the same month of the earlier year. Fresh transactions are very slow and the prices offered byoverseas buyers are as low as $2.65-2.75 against more than $3.00 per kg earlier.

Exporters are of the view that if despatches are to be stepped up, restrictions on exports of hank yarn may have to be relaxed at least for the current year. Besides, a drawback of local taxes amounting to about 4.5 per cent of the value of exports should be allowed along with that of custom and excise levies.

Meanwhile, several spinning units in the south have curtailed their production in view of the depressed local and overseas demand. Some observers predict that the cotton crop in the ensuing season may well be of the order of 170-180 lakh bales of 170 kg each, in view of timely sowings and good rainfall, unless the climate suddenly takes an adverse turn later. There is going to be a substantial reduction in cotton production in the USA in the coming season, but China may not emerge as a big buyer as it has built up substantial inventories and the bulk of these are not affected by recent floods.

In the local market, thevolume of business is very low due to the festival season and rains. The average prices for 20s, 30s and 40s are mostly steady while some coarse and finer counts have registered some improvement.