In early July, overseas cotton yarn offers from Southeast Asian countries saw a broad price hike. Vietnam, Pakistan, India, Bangladesh, and Indonesia all raised quotations, with C32S and above ring-spun, compact, and combed yarns seeing the largest increases in FOB/CNF/CIF terms, while lower-count open-end and coarse yarn adjustments were more moderate. This round of price increases was driven by multiple overlapping factors rather than a single trigger.
Three Forces Behind the Surge
First, ICE cotton futures rebounded in early July, directly raising the raw material cost floor for international cotton yarn. Second, textile and apparel exports from Vietnam, Pakistan, Bangladesh, and India rebounded month-on-month in May and June, indicating recovering downstream orders and supporting mills' pricing power. Third, Indian domestic S-6 spot prices and CCI auction base prices rose sharply, further pushing up Indian and Pakistani yarn offers. Notably, second- and third-tier Indian cotton yarn, which had earlier been priced low and sold quickly, saw significantly fewer offers and orders in July, reflecting mills' reluctance to sell at current levels.
Vietnamese Yarn's Competitive Edge
Amid the broad price increases, Vietnamese yarn showed relative restraint. According to feedback from a large Shaoxing textile import-export company, inquiries and shipments of Vietnamese yarn in early-to-mid July significantly outperformed those of Indian, Pakistani, and Uzbekistani yarn. This advantage stems from two factors: first, Vietnamese mills' price adjustments lagged behind those of other Southeast Asian suppliers, especially for C40S and below, preserving their cost competitiveness; second, geopolitical tensions amplified Vietnam's logistics advantages. After the collapse of US-Iran peace negotiations and repeated strikes in the Strait of Hormuz, crude oil and energy prices surged, and ocean freight rates rose again. Indian, Bangladeshi, and Malaysian mills had to pass on higher transport costs in their CNF/CIF offers, while Vietnamese mills, relying on road and rail networks, avoided these maritime risks and maintained more attractive pricing.
Port Inventories and 'Rush to Export' Effect
Port data shows that arrivals of Uzbekistani cotton yarn, Pakistani siro-spun yarn, Taiwanese open-end yarn, and Indonesian/Vietnamese polyester-cotton yarn have declined over the past two weeks. Meanwhile, some coastal textile and garment factories are engaging in short-term 'rush to export' activities, leading to a steady decline in port cotton yarn inventories. This suggests that despite rising overseas offers, supply pressure in the domestic spot market has not increased correspondingly, and may even provide some price support going forward.
Implications for Buyers and Foreign Trade Firms
The current price hike has moved from the cost side to the offer side, but the pace and magnitude vary by origin. Vietnamese yarn remains a cost-effective choice in the near term due to delayed price adjustments, controllable land transport costs, and competitive pricing. Indian yarn, by contrast, has lost some competitiveness due to high domestic cotton prices and rising ocean freight surcharges. The combination of falling port inventories and the 'rush to export' window may further tighten supply for certain specifications.