According to senior officials of leading spinning mills of Coimbatore, industry watchers and members of various bodies representing the interests of spinning industry, if the current pace of performance is sustained for the next three to six months then the trend could be indicative of the beginning of a ``small boom''.

The optimism, they claim, is based on the high growth in exports and low cotton prices in the domestic market. The industry, fortunes of which are wedded to a bumper cotton crop, hopes to see a subdued cotton market following the latest estimates putting Indian cotton crop at 175 lakh bales (compared to the previous season's actual production of 163 lakh bales) for the current season. Moreover, the improved offtake from export markets has eased pressure on the domestic system. ``There is an improvement in yarn offtake inthe domestic market. We are not able to attribute this to anything specific. We have to wait and see whether the trend continues for some time,'' Sima vice-chairman Vijay Venkataswamy claimed.

Cotton yarn exports for the January-September 1999 period stood at around Rs 4,858 crore compared to Rs 4,349 crore worth shipments made during the corresponding period in the previous year. In fact, there are reports of some spinners making discreet enquiries about availability of idle capacities ``to meet orders-in-hand''. Though realisation from exports has been worrying the industry, movement of yarn would help the mills maintain their individual markets. During last year, most exporting mills had to dump their produce in the domestic yarn markets thus hitting local players.

Paul Morris, chairman of the standing committee of the International Cotton Advisory Committee (ICAC), in a paper presented two months backs stated that projections made by ICAC and FAO suggest textile consumption could grow at anadditional average rate of 8 lakh tonnes a year for the next five years and the growth in cotton consumption could be an average of four lakh tonnes a year for the next five years. However, he ruled out the possibility of a recovery in cotton prices till 2001-2002.

Yet another factor which has triggered an improved offtake, especially in the domestic market, is the drop in the capacity utilisation in the spinning industry. According to South India Textile Research Association (Sitra), around 60 per cent of the mills were in the red at the close of the previous financial year. Many spinning mills based here had no other option but to announce production cutbacks and closures.

According to a prominent spinner supplying to the Ichalkaranji markets, ``the finer counts are doing well. If there were 15 mills supplying 60s-64s count yarn to those markets last year today there are only 6 mills.''

Moreover, cotton merchants who took over mills on conversion basis over a year back to recover costs of rawmaterial supplied by them are today more cost and quality conscious. This has led to the drying up of cotton yarn stocks in the system, according to an industrialist here.

``The knitting industry is slightly better. There could be an improvement in demand for clothing too in the days to come. The consumers craze to invest in white goods is slowly tapering off and this could lead to demand in clothing,'' Venkataswamy said.