It might be interesting to note that cotton yarn production in the first half of 1998-99 had fallen to 987 million kg, but the union textile ministry had expressed a hope that in the second half of the year, it might rise to 1058 million kg, taking the total for the year to 2045 million kg.This hope has, however, not materialised. Actual output in the second half-of-the year could reach just 1035 million kg, taking the total for the year to 2022 million kg.

The industry faced extremely chilly winds during the year. Not only there was a drop in the demand for its production, but prices too declined due to increasing competition both in the domestic and export markets. As many as 80 spinning mills and 13 composite units were forced to roll down theirshutters during the year indicating the severity of uncomfortable situation.Fortunately for the industry, there has been no further closures of any mill in April 1999. On the contrary, one of the closed spinning units has reopened during the month. However, according to industry it might be too early to come to any conclusion from this. It prefers to await the emergence of a long-term trend.

This is because the powerloom sector is facing an uphill task in selling its fabrics. Currently, decentralised weavers in Bhiwandi are said to be observing three holidays a week to keep down their production and avoid inventory build up. In other powerloom centres also, similar situation is said to prevail at present. In Gujarat, the powerloom sector is reportedly contemplating some cutback in capacity and production.

On the export front also, 1998-99 has been a very tough year. Though shipments for the year were fractionally better by 0.33 per cent at 486.78 million kg against 485.17 million kg in the earlier year,in value terms, however, cotton yarn exports slumped during the year by 10.10 per cent to US $1416.52 million from US $1575.69 million in the earlier year.

Prospects for the current year are not yet considered encouraging. This is evident from the fact that the export target for the current year has been lowered to a more realistic level of US $1450 million which is only marginally above the last year's actual exports.

According to leading exporters, some export transactions do take place, but there is nothing much to enthuse about. Korea and some other countries continue to buy a little more, but mostly on hand-to-mouth basis. Secondly, there is hardly any significant improvement in prices realisations. No doubt there are reports that some of economies in East Asia are reviving, but impact of this is yet to be seen in yarn exports.

Cotton yarn 30s combed is fetching just about US $2.85 per kg and carded about US $2.55 per kg. Count 20s is being done around US $2.20 per kg. It is hoped that East Asianeconomies will improve further in the coming months. That might provide a welcome relief to the hard-pressed spinning industry.Meanwhile, the demand for cotton yarn in the domestic market remains sluggish. Medium and finer counts in particular are ruling easy as can be seen from the accompanying table showing the average prices for some of the popular counts.