Indian Prime minister Narendra Modi in aver of curbing the black money took a bold step of demonetizing of higher currency Rs.500 and Rs.1000. These two notes are no longer considered as legal tender. Around 85% of Indian of currency circulation was in these two forms of notes. Now with ban on this currency the market is likely to feel the heat of currency crunch. According to market players, Phenol has been touching its lower range in this year. Further due to currency issue many suppliers won’t lift the material and will pile up the inventories. As a consequence, slowdown in trade and additional pressure in the pricing. All petrochemical business will be directly affected by this decision because many deals are cash transactions, in part to avoid tax,” said an Indian phenol importer. Around 30% of Phenol in India is sold on cash basis which means that demand will further rop by 20%. Moreover payments of earlier purchases are still pending. This will further lead to delay in payments and whole cycle will get disrupted. Although, many traders have welcomed this bold step taken by Modi and believe that it will help a lot in curbing tax evasion and controlling black money inflow.
