Since July, the ex-factory quotes for imported cotton yarn have entered a stalemate. Despite the upward trend in ICE cotton futures and the continuous improvement in month-on-month textile and apparel exports from Southeast and South Asia, feedback from major consuming regions such as Jiangsu, Zhejiang, and Guangdong indicates that FOB/CNF/CIF quotes have not followed suit. Some second- and third-tier brands from India, Vietnam, and Indonesia have even slightly lowered their forward yarn offers. This means the cost-side transmission chain has encountered a clear bottleneck at this stage.
The Divergence Between Cost and Quotes
On the raw material side, Indian S-6 spot prices experienced a 'fall first, rise later' pattern, and CCI's auction floor prices were adjusted accordingly, but overall mill raw material costs fluctuated little. ICE cotton futures returned to the 80 cents/lb mark in early July, theoretically providing cost support for major spinning countries like Vietnam that rely on imported cotton. However, industry public data shows that while some large Vietnamese mills showed increased willingness to raise quotes for C32S and above ring-spun yarns, they ultimately opted for caution in the face of 'no movement' from competitors in India and Pakistan.
The trend for polyester-cotton yarn is clearer. Due to the significant decline in crude oil, PTA, and polyester staple fiber prices, ex-factory quotes for polyester-cotton yarn from Vietnam and Indonesia have dropped relatively notably. This change has directly stimulated inquiries and procurement from coastal fabric mills and intermediaries, with activity picking up since late June.
Strategic Divergence on the Supply Side
It is noteworthy that pricing strategies among mills from different origins have shown significant divergence. Indian branded mills and large factories, due to relatively controllable raw material costs and a preference for purchasing medium-to-high grade domestic cotton for the 2025/26 season, have no plans to adjust quotes for July-September shipments. In Pakistan, domestic cotton prices have risen steadily, with new crop arrivals for the 2026/27 season gradually increasing and mill procurement remaining active. However, export performance to key markets such as China, Bangladesh, and Vietnam has been 'less than satisfactory', leading to a strong wait-and-see atmosphere across the board.
A deeper change lies in the product structure of Pakistani mills. According to industry feedback, demand for imported cotton in Pakistan has remained sluggish since late June, prompting mills to increase their use of domestic cotton. This substitution directly impacts key quality indicators such as yarn strength, CV%, and stability, meaning buyers need to pay extra attention to quality fluctuations during the inspection process.
The Tactical Window for Downstream Procurement
For domestic importers and fabric mills, the current market presents a subtle tactical window. On one hand, the stabilization or even partial decline of ex-factory quotes offers opportunities for bargain replenishment. On the other hand, the increased volatility of ICE cotton futures and the wait-and-see attitude of major suppliers introduce uncertainty to future price direction.
From a category perspective, the price correction for polyester-cotton yarn is more definitive, making it suitable for cost-sensitive orders. For pure cotton yarn, especially high-count Vietnamese yarn, while there is a cost-driven expectation of price increases, actual implementation still depends on follow-up moves from India and Pakistan. Pakistani Siro-spun and open-end yarns have limited room for short-term downward adjustment due to domestic cotton price support.