The Southeast Asian yarn market is experiencing a rare collective price hike. Since early July 2026, cotton yarn offers from Vietnam, Pakistan, India, Bangladesh, Indonesia, and Malaysia have risen broadly, with C32S and above ring-spun, compact, and combed yarns seeing the largest FOB, CNF, and CIF increases, while lower-count open-end and coarse yarn adjustments are more moderate. This price movement is driven by three forces: the rebound of ICE cotton futures, the month-on-month recovery of textile and garment exports across Southeast Asia, and the consecutive large-scale hikes in Indian domestic S-6 spot and CCI auction floor prices.
Background
The price hike is not single-factored. First, ICE cotton futures have been oscillating upwards since early July, directly raising the cost base for cotton yarn. Second, textile and garment export data from Vietnam, Pakistan, Bangladesh, and India for May-June all showed month-on-month rebounds, indicating terminal demand is gradually repairing. More importantly, over the past week, Indian domestic S-6 spot prices and CCI auction floor prices have been raised significantly and consecutively, further pushing up cost expectations for Indian and Pakistani mills.
Notably, offers from Indian second- and third-tier cotton yarn mills have dropped significantly in June compared to May, while these low-priced products had previously seen brisk sales. This suggests cheap supplies are being quickly cleared, leaving higher-priced inventory as a new price anchor for buyers.
Industry Impact
Vietnamese yarn has demonstrated a clear competitive edge during this price hike cycle. According to feedback from a large Shaoxing-based light industrial import and export company, inquiries and shipments for Vietnamese yarn in early-to-mid July have been significantly better than those for Indian, Pakistani, and Uzbekistani yarn. There are two reasons: first, Vietnamese mills' offer adjustments have been slower and smaller in magnitude compared to other Southeast Asian mills, maintaining a strong cost-performance advantage for C40S and below; second, the collapse of US-Iran peace talks and subsequent multiple rounds of mutual strikes have paralyzed the Strait of Hormuz, driving oil, energy, and chemical prices up again, and sea freight costs are soaring. Mills in India, Bangladesh, and Malaysia have had to raise CNF/CIF offers accordingly to offset rising raw material, production, and transport costs.
Vietnamese yarn, leveraging road and rail transport advantages, bypasses the volatility of sea freight, gaining an edge in pricing and delivery stability. This logistics differential is becoming a key variable in the Southeast Asian yarn trade landscape.
Meanwhile, port yarn inventories are steadily declining. Over the past two weeks, arrivals of Uzbekistani cotton yarn, Pakistani siro-spun yarn, Taiwanese open-end yarn, and Indonesian/Vietnamese polyester-cotton yarn have weakened, and some coastal textile and garment factories are engaging in short-term "rush exports" to beat potential tariffs. Port inventory drawdown is accelerating. With falling stocks and rising overseas prices, the supply elasticity of imported cotton yarn is narrowing in the short term.