The government has also allowed for the first-time exports of a small quantity of hank yarn of counts 60s and below within a ceiling of 20 million kg.

Veteran exporters point out in this context that the ceiling for exports of counts of 40s and below which was initially fixed at 200 million kg for 1999 was subsequently raised to 300 million kg but actual shipments under this ceiling in 1999 could be just around 150 million kg.

Thus the earlier ceiling of 300 million kg was neither inadequate nor a hurdle to exports. However, the industry has been pressing the government to remove the ceiling altogether and the textile ministry has tried to oblige spinners by raising theceiling to a level which even the most optimists do not hope to achieve.

No doubt, economies of East Asian countries are reviving and there has been an improvement in their demand for cotton yarn. Even so, it is considered doubtful, whether even the previous year's ceiling of 300 million kg would be reached this year. Achievement of the enlarged ceiling of 500 million kg may remain a far cry.

This is because India is by no means the only or the most competitive exporter of cotton yarn to the world markets. Prices, quality and timely delivery are more important in selling cotton yarn in export markets.

Until now Indonesia, Taiwan, Malaysia, Pakistan etc were main competitors abroad. However recently Uzbekistan has emerged as a fierce competitor in world markets, including quota countries. It is reported to be offering in the overseas markets yarn of count 20s just around US$1.80 and 30s around US$1.90 per kg.

There are also reports that it is prepared to consider counter offers. It would appear thatsome South Korean and Japanese spinning companies have in recent years shifted their plants to Uzbekistan and other countries in Central Asia in view of easy availability of cotton and low cost labour in that region. Pakistan is also an aggressive seller in the world markets.

According to reports reaching here from the Far East, Pakistan is offering its cotton yarn of 20s around $1.93 per kg C/F (on 120 days' credit basis). Reports from the USA state that the textile industry is suffering the pinch from cheaper imports.

Indian spinners feel that the prices for yarn have no doubt fallen to very low levels, but they see a ray of hope for them in the decline of cotton prices and a slight improvement in the domestic offtake and internal prices of late. Exporters of yarn are of the view that there was no need for a ceiling on exports of yarn of 40s and below, looking to substantial idle capacity with the industry.

Besides continuance of restrictions on exports of any cotton yarn or even cotton, did not gowell with the government's claim for deregulation and decontrol.

Exporters have welcomed the move to allow overseas sales of a limited quantity of hank-yarn within a ceiling of 20 million kg.

They point out that there is demand for such yarn from Bangladesh and certain African countries in particular. Some other countries might also import from India grey yarn and process it themselves.

Mercerising in particular, requires hank yarn. The quantity of hank yarn released for exports is, however, very small and it cannot therefore make any substantial addition to overall exports of cotton yarn from the country.