Indian cotton yarn export demand remains weak
In the past week, although cotton prices have rebounded, Indian cotton yarn prices have continued to fall, and yarn mill profits have declined.
That week, the domestic S-6 price in India increased by 1.9%. It fell sharply in the first week of August and rebounded in the past two weeks. However, the price of cotton yarn fell, with most varieties falling by 2 rupees/kg, and the US dollar quotation fell even more because the rupee exchange rate fell again.
Statistics show that in the past three months, domestic cotton yarn prices in India have fallen by 10-14%, yarn mills’ profits have shrunk sharply, and their operating rates have dropped.
In terms of exports, the rebound in cotton prices has limited the space for yarn mills to reduce prices. Affected by the Sino-US trade war, Brexit and economic recession, Indian cotton yarn export demand remains weak.
The United States Department of Agriculture predicts that India’s cotton consumption will increase in 2019/20, and cotton production growth will exceed yarn production growth. However, the recent poor weather in India may have an impact on output, and the rise in MSP prices will also increase cotton costs for spinning mills.
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