In the first half of 1998-99, production of blended yarn amounted to 306 million kg indicating a possible output of 612 million kg during the year.

This would imply an annual rate of just 4.97 per cent over the previous year's output of 583 million kg. The industry had registered an impressive growth rate in the earlier fiscals, an increase of 22.53 per cent in 1996-97 and 20.45 per cent in 1997-98.

A study of the industry's production statistics suggests that it increased by 23.48 per cent in 1993-94, 13.44 per cent in 1994-95, 14.16 per cent in 1995-96, 22.53 per cent in 1996-97 and 20.45 per cent in the fiscal 1997-98.

However, 1998-99 was an inactive yearfor the industry, with its production moving up only by 4.97 per cent (estimated). The delayed impact of east Asian crisis and subdued conditions, which prevailed in the domestic markets were the reasons for this setback. Certain east Asian countries, taking advantage of the financial turmoil and the resultant depreciation of their currencies, started offering fierce competition to Indian manufacturers of blended yarn in the overseas market, particularly in respect of polyester-viscose blended yarn.

This can be seen from the fact that while in quantitative terms exports of polyester viscose yarn from the country rose 15.40 per cent to 27,875 tonnes from 24,155 tonnes in the earlier year, overall price realisations fell by 9.17 per cent to $60.45 million from $66.55 million compared to that of the earlier fiscal. In case of polyester cotton, India had to face less competition because of the advantage of its domestic cotton.

Consequently, exports of polyester-cotton yarn rose in 1998-99 by 54.95 per cent to36,529 tonnes from 19,886 tonnes in the previous year. However, instead of growing proportionately, foreign exchange realisations moved up by 26.48 per cent to $65.25 million from $51.59 million.

In the domestic market, however, blended yarn could do relatively better than cotton yarn which registered a negative growth in the fiscal 1998-99. In view of the reduction in prices of polyester during the year, mills were inclined to make increasing use of synthetics. Secondly, the consumer preference was also in favour of blended fabrics because of their durability and easy-care characteristics. This trend is expected to continue even in the coming years.

In the field of synthetic fibres and yarns, the country has already established huge capacities of nearly 7.70 lakh tonnes of polyester filament yarn and 6.14 lakh tonnes of polyester staple, there is capacity of nearly 2.88 lakh tonnes of viscose staple fibre. The blended yarn industry is thus assured of enough raw materials even from the domestic sources,apart from imports.