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Manmade fibre industry creating new production records

Manmade fibre and filament yarn industry has created new production records in 2002-03, despite the economic slowdown in view of drought conditions in various parts of the country. The output of manmade fibres during the year rose by 9.60 per cent to 913.98 million kg from 833.92 million kg in the earlier year. Production of manmade filament yarn in the country shot up during the year by 14.23 per cent to 1099.14 million kg from 962.17 million kg in the previous year. In terms of bales, the combined production of manmade fibres and filaments taken together amounted to 118.4 lakh bales of 170 kg each.

In contrast, production of cotton during the outgoing season in the country fell 14 per cent to 136 lakh bales of 170 kg each from 158 lakh bales in the previous season.

Cotton production in the country faced two major problems in 2002-03. There was a sharp reduction in acerage to 75.72 lakh hectares from 87.30 lakh hectares in the earlier season. This reduction in area under cotton was partly due to poor price realisations in the earlier season and partly due to inadequate and erratic rainfall. The decline in acerage was as much as 13.58 per cent. A corresponding decline in cotton production was unavaiable. Drought conditions were responsible for some additional fall in production.

Manufacturers of manmade fibres and filaments on the other hand had no such problems. Moreover, in view of shortage and high prices of cotton, they were able to step up their production and sales of both fibres and filaments. No doubt crude oil prices rose during the year, but manufacturers of manmade fibres and filaments were able to pass on the resultant increase in their costs to their customers. Textile manufacturers had no opinion but to pay such increased prices.

The gradual shift from cotton to manmade fibres and filaments continued during the year and cotton was forced to yield some more ground to them. As stated by EICA president K F Jhunjhunwala at the All India Cotton Trade Associations Conference in Mumbai on July 28, 2003. Indian cotton which enjoyed the most favoured fibre status among Indian textile mills, is losing ground slowly. Indian cotton is at the crossroads today, besieged with several intra fibre and inter fibre challenges. During the past few decades, the share of cotton in the global basket of all fibres and filaments has been showing a declining trend. The share of cotton declined from 48 per cent in 1980 to around 41 per cent in 2002. In case of India, the share of cotton came down from 73 per cent in 1990 to around 55 per cent in 2002.

Of course, with the increase in population, total demand for cotton may continue to rise, but its share in overall fibre consumption may remain under pressure.

Compared with the manufacturer of manmade fibres and filaments, the cotton cultivator is always at a disadvantage being dependent on climate. He cannot suddenly increase his production during the course of the season to take advantage of favourable market conditions. Neither he can suddenly reduce his supply to avoid glut and falling prices in the market. On the other hand, the manufacturer of manmade fibres and yarns, who is not dependent on climatic conditions for his manufacturing activity, can suddenly, increase his production if maket conditions appear favourable and cut down production if they turn unfavourable.

In 2002-03, the market conditions for the manufacturers of manmade fibres and filaments were quite favourable and that helped them in stepping up their production.

This was particularly true in for the polyester filament sector. It was able to push up its production in 2002-03 by as much as 14.70 per cent to 993.48 million kg from 866.16 million kg in the previous year. While the textile industry continued to complain at times about business slackness, polyester filament yarn manufacturers were almost unaffected by such business slackness. Introduction of the system of texturising has made it very easy for textile manufacturers to use such texturised yarns.

No doubt the production growth rate in the case of polypropyline filament yarn was much higher around 26.71 per cent, but that was largely becuase of very low base. Quantitatively, production of 25.14 million kg of polypropylene in 2002-03 was insignificant compared to the polyester filament output of 993.48 million kg in that year.

Even production of viscose filament yarn and nylon which had declined in the earlier year improved in 2002-03, probably because of cotton shortage. The viscose filament yarn industry was able to rise its output by 5.04 per cent in 2002-03 to 50.79 million kg from 48.35 million kg in the previous year. Likewise, nylon yarn manufacturers were able to set up their production during the period by 6.86 per cent to 29.73 million kg from 27.82 million kg in the previous year.

In the case of manmade fibres, polyester staple production increased by 5.56 per cent to 582.13 million kg from 551.47 million kg in the earlier year. Viscose staple fibre could achieve the best growth rate 21.22 per cent with its production rising to 224.61 million kg in 2002-03 from 185.28 million kg a year ago. When polyester staple fibre arrived on the scene it was feared that it may wipe out viscose staple fibre. On the other hand, increase in the production of polyester staple has provided an impetus to the viscose staple fibre which can be blended well with polyester fibre as also with cotton. And there has been an increasing demand in the domestic and overseas markets for polyester-viscose and cotton-viscose blended yarns. Production of acrylic fibre and polypropylene fibre also improved during the 2002-03 to 104.78 million kg and 2.46 million kg, respectively.

- M D Dewani