Fluctuations In India'S Cotton Yarn Market

SanjayKJain, CEO of TT company in India, recently wrote an analysis of the current India cotton yarn market.

He believes that in the past few months, the price of cotton yarn in India has been fluctuating violently, and the factory has been in extremely difficult position.

In the period of 7-9 month textile light season, the downstream purchase was very slow and cautious. The market worried that the price of the new cotton yarn fell after a large number of new cotton, and the enterprises that bought a large number of cotton yarn in the earlier period were facing great risks.

Now, with the arrival of the peak season of textile industry, the downstream enterprises are in urgent need of replenishment, and the market demand will gradually enter the peak.

At present, downstream buyers have been waiting for the opportunity, not to the last minute, do not give up easily, avoid being stuck at the high price point.

He said that in recent months, India

Quite unusual, cotton prices in India jumped by 50%, then down by 10%, and increased by 35%. In the next few years, cotton prices in India may continue to decline, but by December cotton prices will still be 25% higher than this year's low.

At the same time, India cotton yarn prices rose by 25% after falling 10%, the current cumulative increase of 12%.

In recent two weeks, demand for cotton yarn in India has been active, prices have bottomed up, and have risen slightly in recent days.

Although it is very difficult to predict the price trend, the following circumstances are worth it.

Attention:

1, India is the largest supplier of cotton yarn in the world.

As cotton and cotton yarn prices do not match, India cotton yarn production has decreased by 12%.

If India's monthly yarn production is less than 40 million kilograms, can the market demand be met? Is India spinning excess capacity really so serious?

2, even if the price of cotton in India falls after November, if the price of cotton yarn is stable, India cotton mill still has no profit, therefore, it is unlikely that India will greatly increase cotton yarn output after November.

3. Cotton planting area in India has been reduced by 12% this year. If output per unit area is raised, cotton production is expected to be the same as last year, so output is still the lowest in nearly five years.

As the initial inventory is very low, cotton prices in India will remain 20% higher than the same period this year.

4, at present, the cotton yarn inventory in India's circulation channels may be the lowest in many years.

As we all know, low inventory is the biggest inducement of price rise.

All buyers want immediate delivery, because they are out of stock now.

5, under normal circumstances, the price of cotton yarn in November -2 showed an upward trend, as demand increased.

6, India and Pakistan textile mills start rate decline, the reason is

In the doldrums, sales at current prices are at a loss, which may lead to insufficient market supply.

Because the loss is too great, the factory raises the price or the pressure of reducing production is very large. Now, there is no intention to reduce the sale price.

According to the above basic analysis, India cotton yarn prices will not continue to fall, all bad factors have passed, and the only problem now is the psychology of the market.

The typical characteristic of bear market is that the market can only see the bearish signal.

Now, the cotton yarn Market in India is beset with huge losses.

However, when the market is suffering from bloodbath, it is the best time to buy. The reversal of cotton yarn market is imminent. Now it is the right time to purchase.

The supply of cotton yarn in India is expected to decrease significantly in October, which is the cumulative effect of cotton yarn production in the past 3 months.