Shipments of cotton yarn in July 2000 fell by 10.85 per cent to 45.21 million kg from 50.71 million kg in the same month a year earlier. In value terms they plunged by as much as 12.76 per cent to US $125.66 million during the period from US $144.04 million. The unit value realisation also declined to US $2.78 per kg from US $2.84 per kg a year ago.

Cumulative shipments for the first four months of 2000-01 have been down by 0.81 per cent to 188.47 million kg from 190.00 million kg. In value terms they have declined by 2.57 per cent to $521.07 million from $534.82 million.Competition in the overseas markets is becoming stiffer by the day, with more aggressive competitors entering the fray. In the European markets, Turkey, Greece, Syria and some Baltic countries have become serious competitors. In the East Asian markets, competition is being offered mainly by Pakistan, Indonesia, Taiwan, and some other suppliers.

Analysts point out that this year 100 per cent export-oriented units engaged in the manufacture of cotton yarn have made considerable contribution to whatever exports have taken place. This is because several of them had indented for foreign cotton at a time when it was quite cheap.

Also they had mostly covered their foreign exchange requirements when the exchange rate was more comfortable. Since then the rupee has nose-dived. Thus these 100 per cent EOUs are having double advantage. Once that advantage is exhausted after a few months, will they able to sustain their contribution to export performance? Analysts find it difficult to predict.Other cotton yarn exporters seem to be fighting a very difficult battle. Unless luck favours them they may have to reconcile themselves with reduced export business.

The benefit of low cotton prices which were available earlier this year may not continue. Though it is too early to predict the ensuing domestic crop, indications from abroad are that cotton may remain costly through out the next season, unless some miracle changes this prospect.

Even if cotton yarn shipments are made, margins may remain under severe pressure unlike in 199-00 when for most part of the year benefits of cheaper cotton were available to cotton yarn producers.

Even now demand is not altogether absent. Neither it is quite brisk. Overseas buyers are not eager to strike quick deals. Nor are they prepared to enter into long-term contracts. They mostly make purchases on hand to mouth basis. Moreover in these days of quick internet communication, buyers are in a position to quickly obtain comparative quotations from various competing countries.The world has become so small.

The prevailing prices in some of the overseas markets are quite unencouraging. For instance, in Hong Kong 20s carded is being sold at $1.95 per kg; 20s double carded at $2.10 - 2.15 per kg; 20s double combed around $2.35; 30s carded at $2.25 and 32 double combed around $2.95 per kg. Obviously Hong Kong firms might be getting their supplies at cheaper than these rates. It is stated that spinners from Pakistan stand in a advantageous position in Asian markets with their rupee placed around PRs 54 to a dollar, and the advantage of cheaper domestic cotton. Indonesia has also emerged as an aggressive supplier. Chinese spinners are reported to have reduced their prices.

Taiwan is offering finer counts at cheaper rates.Some reports reaching here also indicate that Japan has decided to remove the anit-dumping duty that was applicable to cotton yarn imports of certain counts from Pakistan. Indian cotton yarn enjoys favourable conditions in the Bangla Desh market where it is cheaper than its domestic production.