Over the past week, cotton yarn offers from Vietnam, India, Pakistan, Indonesia and Kazakhstan have entered a moderate upward channel, with OE yarns, low-count siro and compact yarns seeing larger gains, while high-count carded and combed yarns from India and Vietnam remained stable. This divergence reflects a tug-of-war between rising raw material costs and limited downstream acceptance.
Price Structure Divergence: Low-count Follows Cost, High-count Holds
From a product mix perspective, the price hike is not broad-based. OE and low-count yarns led gains, driven by cotton costs—ICE cotton futures for December broke above 82 and 85 cents per pound, raising processing costs. High-count yarns stayed flat because their price base is already high, and mills fear losing orders. Meanwhile, demand for high-count yarns remains limited as the high-end fabric market recovery is slow.
In parallel, 16-45s polyester-cotton yarn offers from Vietnam and Indonesia rose slightly, supported by falling port inventories and rising polyester feedstock prices. Traceable cotton yarns also attempted small increases, but coastal mills in Jiangsu, Zhejiang and Fujian reported insufficient new traceable orders, making price hikes unsustainable without demand support.
India Yarn Active: Tariff Exemption Reshapes Competitiveness
Amid overall cautious sentiment, Indian yarn stands out. A trading company in Hangzhou noted that inquiries and pickups from coastal weavers and fabric mills have slowed, but Indian yarn, especially medium-to-high grade OE and medium-count ring-spun, remains active. This is not accidental.
On one hand, Indian domestic S-6 spot prices and CCI auction floor prices have risen sharply since mid-August, prompting buyers to lock in supplies before mills hike FOB/CNF offers. On the other hand, India's temporary cotton import tariff exemption from June 1 to October 31, 2026, has allowed Indian mills to increase the share of US, Brazilian and Australian cotton in their blends, improving yarn strength, CV% and consistency. Weavers and apparel makers are paying more attention to Indian yarn as a result.
Transmission Effects on Buyers and Trading Firms
The pass-through of higher foreign yarn prices is not immediate. Coastal weaving mills face dual pressure: rising input costs squeezing margins and insufficient new orders preventing upward price transmission. In this context, buyers prefer hand-to-mouth procurement over bulk stocking. For trading firms, improved Indian yarn quality offers a cost-effective alternative for non-traceable orders, but they must monitor the tariff exemption expiry and exchange rate volatility.
Overall, overseas yarn prices are likely to stay firm in the short term, but upside is capped by demand. Market participants should remain flexible, avoiding panic buying or excessive bearishness.