During July, coal production in the country was up 6.3 per cent to touch 88.4 million tonnes. This is two per cent higher compared with the corresponding period of the previous year.

Production in July alone amounted to 22.43 million tonnes. Between April and June, the production was more or less same at 66 million tonnes which is a mere 0.45 million tonnes more than the previous period.

The offtake of coal continues to show a negative growth and, according to CMIE, July 1998 consumption was two per cent lower than that of July last year. The impact of recession and the consequent slowdown in the economy has had its impact on this industry.

For the first quarter consumption of domestic coal by various sectors declined. Power sector's consumption of coal declined by two per cent while that of steel fell by four per cent.

Inthe case of cement and fertilisers the fall was more pronounced.

Consumption of coal by cement manufacturers' in the country fell by 38.1 per cent and fertiliser manufacturers consumed 20 per cent less coal.

The sharp fall in the case of cement and fertiliser is attributed to imports. Many coast-based manufacturers, taking advantage of lower inland freight, continue to import coal from Indonesia and South Africa. The recent depreciation in rupee and the increase in import duty has been offset to a large extent by the fall in international price of coal. Moreover, higher calorific value, lower moisture and ash content still gives them a better deal in opting for imported coal over quality erratic-domestic coal.

The imports during the first quarter of 1998-99 was 3.45 million tonnes as against 3.95 lakh tonnes in the previous year. The fall of 14.5 per cent, according to industry sources, was more due to lower imports by the electricity boards.