The simultaneous rise in imported yarn prices and slowing port shipments in late July and early August may appear contradictory, but it actually signals a structural shift in the imported yarn market. According to China Customs data, since late July, FOB/CNF/CIF quotes from major producing countries including Vietnam, India, Indonesia, Bangladesh, and Uzbekistan have generally increased, while Pakistani yarn prices remained stable, and some small Vietnamese mills even cut prices. This rare divergence warrants a fresh look at procurement strategies for coastal weavers and traders.
Background
The direct drivers of this price hike are the fluctuating rise of ICE cotton futures in late July and the consecutive increases in India's CCI reserve prices. Meanwhile, textile and apparel export data from Bangladesh, Vietnam, and India showed faster month-on-month and year-on-year recovery in June and July, indicating improved overseas demand. However, the price increase did not cover all origins—Pakistan kept prices stable due to steady domestic demand, limited export volumes, and lower domestic cotton prices from quality decline in the 2026/27 crop.
More notably, some second- and third-tier Vietnamese brands reduced FOB/CNF quotes for open-end spun yarn, bucking the trend of large mills. These low-priced supplies, along with relatively low quotes for Pakistani siro-spun and 21-32S ring-spun yarn, are attracting coastal weavers and intermediaries to port bonded warehouses for alternatives.
Industrial Impact
The price divergence masks persistent weakness in demand. According to a medium-sized textile import-export company in Zhejiang, due to factors such as consecutive 100% sales of central reserve cotton, the end of the World Cup, and sluggish growth in cotton product export orders, inquiries and orders for bonded and afloat cotton yarn from coastal weavers, fabric mills, and garment factories in Guangdong, Jiangsu, and Zhejiang have declined notably since late July compared with May and June. Some traders report slower shipments and rising pressure.
This means that despite cost support for price increases, downstream demand is insufficient to absorb them, hindering smooth price transmission. For buyers, this is not the time to blindly chase price increases; instead, they should leverage price differences among origins to lock in cost-effective supplies. For traders, slower inventory turnover at ports warrants caution over capital occupation and price correction risks, especially for those who stocked up at high prices earlier.
From an industrial chain perspective, the substitution effect of domestic yarn is strengthening. Continuous sales of reserve cotton have kept domestic cotton costs relatively stable, weakening the price advantage of imported yarn. If foreign quotes continue to rise while domestic demand remains weak, port shipments of imported yarn may shrink further.