Polyester Staple Fibre Demand Seen Growing At 22%

"The demand/supply is expected to be balanced at around 300,000 tonnes," the company said in a release announcing the commissioning of a new 80,000-tonnes per year PSF plant.

"Reliance is expected to commission another 80,000-tonnes PSF plant within the next six months," the release said.

The PSF industry has shown a compounded growth rate in consumption of about 16 per cent over the past 10 years, it added.

"It is expected that total supply of PSF during 1997-98 will exceed 550,000 tonnes," the release said, adding that the company hoped to enhance its market share to nearly 55 per cent in 1997-98 from 40 per cent.

The international price of PSF rose by 15 per cent to $1.10 per kg in recent weeks.

Producers also raised prices to Rs 57 per kg from Rs 52.

"In order to expand the market, domestic manufacturers have priced their products substantially cheaper than the

international price," the release said.

The company said it expected polyester staple fibre consumption to increase because of the very low prices which encourage substitution from cotton variety to polyester.

In India, polyester products costs more than cotton.

Cotton prices are about 20 per cent cheaper than world prices.

"As and when the government allows the cotton growers to export, the cotton prices will track the international prices.

This will further enhance consumption of PSF."

During the first six months of 1996-97 (April-March), around 20,000 tonnes of polyester staple fibre was imported, Reliance Industries said.