India’s monetary policy affects the cotton market, and yarn prices may rise accordingly
In the week of November 9-16, Indian Prime Minister Narendra Modi suddenly announced that the Indian rupees in denominations of 500 and 1,000 in circulation will be officially invalidated from midnight on November 9.
It is understood that the reason for this decision is that 80% of India’s trade is cash transactions, and tax evasion is a very serious problem. Affected by this decision, the Indian economy was once in chaos. Ginning mills were waiting for buyers to pay. More than 80% of garment and weaving mills used cash for transactions, resulting in buyers being temporarily unable to perform their contracts. Textile mills were unable to pay workers wages in a timely manner. The Indian government is currently trying to figure out how to solve the payment problem.
At present, the volume of new cotton on the market in India has dropped by 50%, and domestic cotton prices have begun to rebound rapidly, with S-6 rising by 4% within a week. Indian cotton yarn prices remain stable. The competitiveness of Indian yarn has just recovered after the recent decline in international cotton prices. However, this incident may force spinners to increase their quotations. The quotations of combed yarn and blended yarn may be increased due to the increase in cotton prices.
As of November 16, the price of JC30SFOB in India has been reduced by 15 cents/kg from last week, a decrease of 4.76%, and an increase of 26.58% from the same period last year; the price of blended yarn 30S has been reduced by 10 cents/kg from last week, falling The amplitude was 3.51%, an increase of 27.91% compared with the same period last year. India’s monetary policy affects the cotton market, and yarn prices may increase accordingly
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