In mid-July, the imported cotton yarn market has seen overseas quotations stabilize rather than rise alongside ICE cotton futures, as many traders had expected. Feedback from weaving mills and trading companies in key coastal textile hubs like Jiangsu, Zhejiang, Fujian, and Guangdong indicates that FOB/CNF prices for cotton yarn from India, Vietnam, and Indonesia have remained flat, with some second- and third-tier brands' 'futures yarn' even seeing hidden discounts.
This price deadlock reflects a complex tug-of-war between upstream costs and downstream demand. On one hand, ICE cotton futures rebounded above 80 cents/lb in early July, providing cost support for large Vietnamese mills to raise prices. On the other hand, a sharp decline in polyester staple fiber, PTA, and other chemical fiber raw materials has led to notable price drops for polyester-cotton yarn from Vietnam and Indonesia, pulling down the overall cotton yarn price center.
Diverging Cost Trends: Pure Cotton vs. Polyester-Cotton
From a cost structure perspective, Indian S-6 cotton spot prices experienced a 'first down, then up' fluctuation over the past week, with CCI's auction base prices also adjusting synchronously. However, the overall volatility was limited, keeping Indian mills' raw material costs relatively stable. Meanwhile, the premium of Indian cotton over international cotton prices is narrowing, prompting mills to prefer purchasing domestic 2025/26 crop cotton over expensive imports. As a result, Indian brand mills have kept their July-September shipment cotton yarn quotations unchanged.
Pakistan's situation is more unique. The country's 2026/27 new cotton crop is gradually entering the market, with mills actively purchasing, leading to stable-to-rising domestic cotton prices. However, external demand remains lackluster, with exports to China, Bangladesh, and Vietnam performing only 'barely satisfactory,' leaving mills and traders in a wait-and-see mode. Notably, due to low demand for imported cotton, Pakistan's mills are increasingly using domestic cotton, which may affect key quality indicators such as yarn strength, CV value, and stability—a red flag for buyers.
In contrast, polyester-cotton yarn has seen significant price declines driven by the sharp drop in crude oil, PTA, and polyester staple fiber. This price weakness has attracted inquiries and orders from coastal weaving mills and intermediaries, with order volumes picking up since late June.
Demand-Side Divergence: High-Count Yarn Wants to Rise, Low-Count Yarn Under Pressure
From a product structure perspective, different yarn counts face vastly different pricing environments. Large Vietnamese mills have shown a stronger willingness to raise prices for C32S and above ring-spun yarn and high-count open-end yarn, following ICE cotton's return above 80 cents/lb. However, increased volatility in international cotton prices and the 'wait-and-see' stance of competitors like India and Pakistan have made these mills cautious, fearing that aggressive price hikes could erode market share.
In the low-count yarn segment, Pakistan's siro-spun yarn and open-end yarn prices are more supported by domestic cotton costs, but weak external demand limits upward momentum. Overall, the imported cotton yarn market is exhibiting a 'stable volume, diverging prices' pattern: total orders remain steady, but price differentiation across categories and origins is intensifying.
Practical Insights for Buyers and Foreign Trade Companies
In this stalemate, procurement strategies need to be more granular.
For Buyers - Monitor quality risks from Pakistan: The rising use of domestic cotton may affect yarn quality; request third-party test reports before ordering and increase inspection frequency after arrival. - Seize opportunities in polyester-cotton yarn: With polyester staple fiber prices at lows, polyester-cotton yarn offers good value; consider increasing stock, but watch for cost pass-through if raw materials rebound. - Wait on high-count yarn: Vietnamese mills have yet to implement price hikes; lock in quotes by late July to avoid future cost pressures.
For Foreign Trade Companies - Diversify sourcing: With diverging quotations from India, Vietnam, and Pakistan, flexibly allocate procurement sources based on customer needs and product quality to avoid single-origin dependency. - Hedge with futures: Given increased volatility in ICE cotton, use cotton futures or options to lock prices for forward orders exceeding three months. - Watch currency and freight: The US dollar trend and shipping costs remain key variables; include currency fluctuation clauses in contracts or secure long-term freight agreements with shipping lines.
Q3 is traditionally the stocking season for the textile peak period. The current stalemate in the cotton yarn import market is unlikely to last. Once downstream orders firm up, cost-side pressures will quickly transmit to quotations. For industry players, now is the critical window to reassess supply chains and optimize procurement timing.