According to some importers, the overseas suppliers are now offering their PSF at as low a price as $050 to $0.55 per kg. About a month ago they were offering the same material at $0.60 to 0.65 per kg. The rupee equivalents of their new quotations may be just around Rs 21.25 to 23.32 per kg.

Not only Taiwan but some other countries like South Korea, Thailand and Indonesia are fiercely competing in the world markets as they have already set up capacities far in excess of their domestic requirements. Moreover, in view of their financial crisis they are selling whatever they can to earn foreign exchange taking advantage of their highly depreciated currencies.It may be interesting to recall that before financial crisis struck these countries, PSF used to be quoted around $1.10 per kg. After the currency turmoil, international prices for this fibrestarted receding very rapidly and are now just about half of what they were prior to July 1997.

This has badly hit PSF producers in other parts of the world. Several producers in Europe and the US have been forced to curtail their production.It might be interesting to recall that Japan, a major producer of PSF has set up huge capacities even in some of the neighbouring countries, since its domestic textile industry is facing serious problems. Its domestic capacity is around 9.20 lakh tonne, while it has capacity of nearly 9.80 lakh tonne in the neighbouring countries. The Japanese companies are also in fray from their overseas locations.

Some major domestic producers of PSF have already pruned their prices to about Rs 40.50 per kg. Some units are also selling the material at still lower prices by offering discounts.

Reduced prices have a two-fold impact. On the one hand, domestic producers are being forced to keep their production down. On the other hand, they have been completely driven out of theexport markets for PSF. Some consumer circles believe that the rate of domestic production of PSF might now be around 40,000 tonne per month compared to the earlier production of 48,000 tonne.

When domestic producers were stepping up their capacities, they on the one hand, had in view the possible growth of the domestic market for PSF and on the other hand the possibility of pushing up their exports to the overseas markets. Till the end of 1997-98 they made considerable headway in stepping up their exports, but the situation changed thereafter as competition became increasingly intense.

Shipments of PSF that which have been plunging since then came down to zero in December 1998. The chances of any significant revival of these exports remain unencouraging at present.

In the case of PFY exports there has been a precipitate decline since March 1998. However, in view possibly of some outstanding contracts some shipments are still taking place. According to exporters however fresh business is notforthcoming. The table reveals the drop in PSF and PFY exports from the country since March last:

Compared with the same period of the earlier year, exports of PFY show an improvement of 21.47 per cent in terms of quantity but a decline of 4.92 per cent in terms of the foreign exchange earned. In the case of PSF such comparison reveals shows a startling drop of 74.56 per cent in terms of quantity and 78.95 per cent in terms of foreign exchange earnings.