Sources also point out that inspite of the closure of so many units, there is an over-supply of blended yarn as the demand for it, both in the domestic and overseas markets had slowed down.

Production of blended yarn in the country was around 51.93 million kg in March this year. It had, however, fallen to 49.02 million kg in June 1998. There might have been further decline in output in the subsequent months. In spite of this, the manufacturers were finding it difficult to sell their yarn.

Most mills were trying to bring down their inventories which had consequently fallen from 32.14 million kg at the end of March last to 27.41 million kg by the end of June 1998.So far as exports of blended yarn are concerned polyester-viscose yarn shipments have plummeted to 1981.89 tonnes inOctober from 2268.94 tonnes in September this year. Likewise, despatches of polyester-cotton yarn have declined during the period from 2629.28 tonnes to 2456.30 tonnes.

What is still worse is the fact that price realisations have fallen sharply in the overseas markets in view of fierce competition, particularly by Indonesia and to some extent by Thailand. This is evident from the fact that though the cumulative exports of P/V yarn in the first seven months of 1998-99 were higher by 16.83 per cent at 17,409 tonnes compared with 14,901 in the same period, foreign exchange realisations dropped by 4.51 per cent during the period to US$39.63 million from US $41.50 million.

According to industry sources P/V yarn of 30s was now being offered in the overseas markets around US $60.1.70 per kg. This was not at all a remunerative price. The industry was however continuing its production, hoping that the situation may improve in near future.

However,no one could say when this would happen. Some more closures cantake place, if this situation persists.

The position of independent texturisers, according to sources is equally bad. Exports of texturised yarn are down. The position of POY is equally unsatisfactory. Texturised yarn of 150D is being traded in the market around Rs 62 per kg (inclusive of excise and other levies and charges).

Similarly, 85D and 80D are being offered around Rs 62 and Rs 74 per kg (inclusive taxes and levies). When asked about immediate prospects of the industry, sources say that the prices have already fallen so low that there is little scope for any further decline, though the recovery was not yet in sight, as the domestic as well the overseas markets still remained uninviting.