Effects of yuan–dollar exchange rate changes on world cotton markets

Abstract

From April 2018 to August 2019, the Yuan has declined in value relative to the US dollar by 12.6%, and the effects of this decline have not been studied. This study analyzes the effects of this fall in Yuan value, in isolation of tariffs, on US, Chinese, and world cotton markets. The results show that the adverse effects of the decline in Yuan value reverberate throughout world cotton markets and exacerbate the detrimental effects of the Chinese cotton tariff.