Since late August, offshore cotton yarn prices have shown a rare divergence: Vietnamese yarns remained stable, Indian and Pakistani yarns continued to rise, while Indonesian and Malaysian low-to-mid count rotor-spun yarns slightly declined. This divergence is not a simple cost pass-through but a result of domestic supply-demand dynamics, policy expectations, and international trade risks in each producing country. For Chinese fabric mills and traders, this means a narrowing procurement window and rising performance risks.
Background
The core driver of this divergence comes from India. According to industry public data, by the end of August, India's domestic S-6 spot ex-factory price had risen to 69,700 rupees per candy (approximately 93.22 US cents per pound), and CCI's 2025/26 auction floor price was raised to 68,200 rupees per candy. On September 1, S-6 quotes surged again, with CCI auction floor prices also inching up. Rapidly rising cotton costs directly pushed up Indian cotton yarn US dollar quotes, with medium-to-high count carded and combed yarns seeing larger increases.
Meanwhile, ICE cotton futures for the December contract rose 6.69 US cents per pound over the same period, providing cost support for offshore quotes. However, Vietnamese yarns did not follow the uptrend; only a few branded large mills with high-spec bleached yarns saw slight increases, while bonded and shipment quotes remained stable overall. This reflects Vietnamese mills' focus on maintaining market share rather than passing on costs, aided by relatively stable domestic cotton prices and better order visibility.
Industry Impact
Offshore quotes for low-to-mid count rotor-spun yarns from Indonesia, Malaysia, and Bangladesh not only failed to rise but slightly declined, with bonded and below-32s pure cotton and blended yarns staying stable. These yarns are mostly low-to-mid count, facing intense competition and high price sensitivity among buyers; raising prices risks losing orders. Additionally, these countries rely heavily on imported cotton, and the transmission of international cotton price increases lags, keeping short-term quotes under pressure.
But behind the divergence lies a bigger risk—delivery performance. Reports from trading companies in Jiangsu, Zhejiang, and Guangdong indicate that due to sharp fluctuations in Indian and Pakistani domestic cotton prices, mills and exporters have slowed deliveries, raising the risk of defaults or cancellations on "forward yarn" orders. Indian mills are less willing to accept forward orders, showing a strong inclination to hold stocks and wait for higher prices, with some possibly failing to ship as contracted. For Chinese fabric mills, this means even locked-in prices may face material shortages or delayed deliveries, disrupting production schedules and order fulfillment.