The price gap between imported and domestic cotton yarn is opening up in a way rarely seen. According to China Customs data and publicly available industry figures, ICE cotton futures have undergone significant volatile retreat since late August, while cotton prices in India and Pakistan have declined continuously in early September. FOB/CNF/CIF quotes for cotton yarn from Vietnam, Indonesia, Uzbekistan and other major sources have softened overall. Yet domestic yarn prices have not followed the decline in Zhengzhou cotton futures and spot cotton prices. The landed-cost gap between imported and domestic yarn has therefore continued to widen. For coastal weaving mills, this is not merely a price signal but a re-opening of the procurement window.
Divergence in Overseas Quotes: Coarser Counts Cut More
Looking at the quote structure, this round of overseas adjustment is not uniform. Open-end yarns and coarse-count ring-spun yarns have seen notably larger cuts, while carded yarns of C32S and above, as well as medium-to-high count combed yarns, have adjusted only modestly. Indian JC60S and JC80S have remained weak but stable, as bonded and shipment offers are scarce and costs remain elevated.
There is a clear cost logic behind this divergence. Coarse-count yarns are more sensitive to raw cotton price fluctuations. After cotton prices in India and Pakistan declined continuously, spinning mills were the first to concede margins. High-count combed yarns, by contrast, require higher-grade raw materials and longer production cycles, leaving mills reluctant to cut prices. For buyers, this means the value window is wider for low-to-medium count yarns than for high-count yarns.
It is worth noting that Vietnamese OEC10S-21S FOB/CNF quotes are slightly lower than those from India, Pakistan and Indonesia, making them more competitive. They have drawn considerable attention from denim, knit underwear, knit fleece, home textile, corduroy and labor protection product manufacturers in Guangdong, Fujian and Zhejiang. The price differentials among origins are reshaping the procurement map.
According to feedback from traders, some above-scale branded spinning mills in Vietnam, India and Pakistan were the first to lower overseas quotes, forcing second- and third-tier brands to follow suit. Proactive price cuts by branded mills indicate that order pressure has reached the quoting stage, while followers face a dilemma between margins and market share.
Widening Gap Between Domestic and Imported Yarn Revives Mill Buying
On the domestic front, the traditional peak season of 'Golden September and Silver October' has arrived, accelerating destocking at spinning mills. Prices have not declined in tandem with Zhengzhou cotton futures and domestic spot cotton. A few above-scale mills have even raised ex-factory prices for open-end yarn. This 'stable domestic, falling overseas' pattern has directly widened the landed-cost gap between imported and domestic yarn.
What does a wider price gap mean? For weaving, fabric and garment mills, the cost advantage of imported yarn at equivalent quality is expanding. Especially when short, scattered and small export orders remain dominant, factories prefer flexible procurement and rapid turnover over stockpiling domestic yarn. This explains why demand for low-to-medium count yarn from Vietnam, India, Pakistan and Bangladesh continues to recover in coastal regions, with spot trading relatively active.
But revived buying interest does not mean risk-free. A high share of short and small orders casts doubt on demand sustainability. Once overseas quotes stabilize and rebound, or domestic mills cut prices more aggressively to destock, the current price window could narrow quickly. For traders, the timing of currency and price hedging is more critical than ever.
From a supply chain perspective, lower overseas quotes pressure Southeast Asian spinning mills but benefit domestic weaving mills. This 'upstream under pressure, downstream benefiting' pattern rarely lasts long. Once Southeast Asian mills cut production or raw material costs rebound, overseas quotes will be the first to recover, and the cost advantage for domestic mills will fade.