It might be interesting to note that exports of cotton yarn (including a very small quantity of sewing threads) in 1999-2000 were of the order of $1,541 million against the reduced target of $1,500 million. Taking this into consideration the target for the current year was raised to $1,700 million, ignoring the fact of fierce competition in the overseas market. If the target is to be reached shipments should pick up. Actually they seem to be sliding down.

For instance, in the first six months of 2000-01, shipments have been actually lower around $740.15 million compared with despatches worth $783.31 million in the same period of the earlier year. This has raised fears that actual exports this year might be lower than the last year's level of $1541 million, let alone the question of attaining the ambitious target of $1700 million.

The tempo of exports was reasonably satisfactory in the first quarter of 2000-01 when despatches, as can be seen from the accompanying table, amounted to US $142.56 million kg valued at $382.99 million. In the second quarter however the situation deteriorated and shipments dropped to 123.91 million kg valued at $344.52 million.

Exports of cotton yarn in the second quarter thus shows a drop of about 13.08 per cent in volume and 9.78 per cent in terms of value compared with the earlier quarter. What is even more worrisome is the fact that cotton yarn remains in the buyer's market abroad and purchasers are not willing even to concede yarn prices that may fully reflect the increase in the cost of raw materials. This is because there are plenty of aggressive sellers in the export markets as spinners who want to remain in business have no option but to sell even under unfavourable market conditions.

So far as Indian exports are concerned, another notable feature of the present export business is that bulk of the present exports are by EOU who are under an obligation to export. This becomes clear from the fact that others are unable to book any worthwhile business. For instance, the general ceiling for exports to non-quota countries has been fixed at 500 million kg and 50 million kg for hank yarn. However in the first nine months of 2000, actual despatches have been meagre 90.52 million under the general ceiling and just 0.73 million kg under the hank yarn ceiling. It is clear that even half of these4 ceilings might not be reached by the end of the year.

According to export trade circles, European markets are down in view of the falling euro and competition from other suppliers like Turkey and some Central Asian countries. Pakistan is also comparatively cheap. It is said to be offering 30s combed around US $2.50 per kg. while 32s double is being traded around US $2.62 - 2.70 per kg.

Referring to the impact of the present insipid conditions in the market on spinners, trade sources point out that while Amit Spinning Industries was able to raise its net sales in the first half of 2000-01 to Rs 47.48 crore from Rs 44.93 crore in the same period of the earlier year, its net profit fell during the period Rs 0.32 crore from Rs 1.15 crore. The fact that the situation has deteriorated particularly in the second quarter of 2000-01 can also been seen from the company's performance. Its second quarter net profit was only Rs 0.18 crore compared with Rs 0.80 crore in the same period of the earlier year.