International Cotton Yarn Prices Rise, Vietnamese Yarn Gains Export Edge with Cost and Logistics Advantages

In the first half of July, international cotton yarn offers saw a broad uptick, driven by a combination of ICE cotton futures rebound, a sequential recovery in textile and garment exports across Southeast Asian countries, and consecutive price hikes in Indian domestic cotton. According to industry data, yarn offers from Vietnam, Pakistan, India, Bangladesh, Indonesia, and Malaysia all increased to varying degrees, with C32S and above ring-spun, compact, and combed yarns seeing larger FOB, CNF, and CIF adjustments, while lower-count open-end and coarse yarns saw more modest increases.

Background

This round of price hikes is not an isolated event. Since early July, ICE cotton futures have rebounded due to weather speculation and fund inflows, directly raising the cost of cotton-based yarn. Meanwhile, textile and garment export data from Vietnam, Pakistan, Bangladesh, and India from May to June showed a broad month-on-month recovery, indicating a moderate rebound in downstream demand. The consecutive sharp increases in India's S-6 spot prices and CCI auction floor prices further pushed up export costs for Indian cotton yarn. Notably, Indian second- and third-tier cotton yarn, which had previously been priced low and sold quickly, saw a marked reduction in inquiries and offers in July, as suppliers proactively withdrew low-priced volumes under cost pressure.

Industry Impact

Against the backdrop of overall price increases, yarn from different origins showed divergent performance. According to feedback from a large textile import-export company in Shaoxing, inquiries and shipments for Vietnamese yarn in early to mid-July were significantly better than those for Indian, Pakistani, and Uzbekistani yarn. Two key factors explain this. First, Vietnamese mills adjusted their offers more slowly than other Southeast Asian mills, and the magnitude of increases was smaller than those from India and Pakistan, maintaining the cost advantage of Vietnamese yarn, especially C40S and below. Second, geopolitical factors introduced logistics uncertainties—the breakdown of US-Iran peace talks and repeated attacks near the Strait of Hormuz drove up oil and energy prices, and ocean freight rates rose again. Indian, Bangladeshi, and Malaysian mills were forced to raise CNF and CIF quotes to absorb higher transport costs, while Vietnamese mills, leveraging road and rail transport, gained an extra buffer in cost control.

From a port inventory perspective, arrivals of Uzbekistani cotton yarn, Pakistani siro-spun yarn, Taiwanese open-end yarn, and Indonesian/Vietnamese polyester-cotton yarn have weakened over the past half-month. At the same time, some coastal textile and garment companies have engaged in short-term "rush to export" activities, leading to a steady decline in port cotton yarn inventories. Falling inventories, combined with rising offers, provide short-term support for import yarn prices.

Practical Recommendations

For Buyers - Prioritize Vietnamese C40S and below cotton yarn, as its cost advantage becomes more pronounced during price hike cycles; consider locking in some medium-term orders. - Be cautious of further price adjustment risks for high-count Indian and Pakistani yarns; adopt a phased procurement approach rather than bulk orders to diversify cost fluctuations. - Closely monitor the Strait of Hormuz situation and ocean freight trends; when necessary, shift orders toward Vietnamese origins with better road transport access.

For Foreign Trade Companies - Leverage Vietnamese yarn's logistics advantages by proactively highlighting delivery stability and timeliness in quotes to differentiate from other origins. - Pay attention to the supply tightening signal from declining port inventories and adjust stocking pace accordingly to avoid chasing prices at later stages of increases. - Stay alert to supply contraction in Indian second- and third-tier yarns and seek alternative sources early, especially for lower-count open-end yarn supply gaps.