The imported cotton yarn market is experiencing a notable price surge. Since early July, export quotes from major producing countries including Vietnam, India, Pakistan, Bangladesh, and Indonesia have broadly increased, with C32S and above ring-spun, compact, and combed yarns seeing the largest FOB/CNF/CIF hikes, while lower-count open-end and coarse yarn adjustments have been more moderate. This round of price increases is not driven by a single factor but rather a triple convergence of international cotton prices, regional demand recovery, and geopolitical risks.
Price Drivers: A Triple Convergence
First, upstream raw material costs are climbing. The rebound in ICE cotton futures in early July, combined with consecutive large hikes in Indian S-6 spot prices and CCI auction floor prices, directly pushed up production costs for yarns using Indian cotton. Second, the month-on-month rebound in textile and apparel exports from Vietnam, Pakistan, Bangladesh, and India during May-June signals recovering downstream orders, providing demand-side support for price hikes. Third, geopolitical factors cannot be ignored—the breakdown of US-Iran peace talks and subsequent multiple rounds of mutual strikes have paralyzed the Strait of Hormuz, driving up crude oil and energy prices and causing ocean freight to rise again. CNF/CIF quotes from Indian, Bangladeshi, and Malaysian mills have had to be adjusted upward accordingly.
Notably, the pace and magnitude of price increases vary significantly by origin. Market feedback indicates that Vietnam yarn's export quote adjustments have generally been slower and smaller than those of other Southeast Asian mills, especially for Indian and Pakistani yarns. For C40S and below specifications, Vietnam yarn's cost-performance advantage remains strong, leading to significantly better inquiries and sales in the first half of July compared to Indian, Pakistani, and Uzbek yarns.
Competitive Landscape: Vietnam's Transport and Cost Edge
Vietnam yarn's sales advantage in this price surge stems not only from its slower adjustment pace but also from its unique transport conditions. Unlike Indian, Pakistani, and Bangladeshi mills that rely on sea freight, Vietnam yarn can enter China via road and rail. Against the backdrop of sharply rising ocean freight due to the Hormuz crisis, this land route cost stability becomes a key competitive edge. Additionally, the number of offers and quotes from India's second- and third-tier cotton yarn suppliers has notably decreased compared to June, further weakening India's supply flexibility and creating market space for Vietnam yarn.
Looking at port inventories, arrivals of Uzbek cotton yarn, Pakistani siro-spun yarn, Taiwanese open-end yarn, and Indonesian/Vietnamese polyester-cotton yarn have been declining over the past half month. Combined with short-term 'rush-to-export' demand from some coastal spinning and weaving mills, overall port cotton yarn inventories are steadily falling. Declining inventories imply tighter near-term supply, which in turn supports spot prices and could trigger further domestic price increases.
Industry Impact: Rising Costs and Supply Chain Adjustments
For domestic fabric mills and end-use garment companies, rising imported yarn prices directly translate to higher procurement costs. Larger increases for C32S and above specifications will squeeze profit margins for fabric producers primarily using medium-to-high count yarns. Smaller increases for lower-count open-end yarns may prompt some buyers to adjust product mixes toward more cost-effective options.
Meanwhile, Vietnam yarn's sales advantage may accelerate importers' and weavers' reassessment of supply sources. With elevated freight costs and geopolitical uncertainty, the risk of relying solely on sea routes is magnified. Vietnam, as a land-bordering supplier, offers greater stability. In coming months, Vietnam's share in China's imported cotton yarn market is expected to rise further, while Indian and Pakistani yarn competitiveness may continue to weaken.