Imported cotton yarn prices are entering a new upward cycle, but the increases are uneven: open-end (OE) yarn, low-count siro yarn, and compact siro yarn are leading the gains, while high-count yarn above 50S remains stable. This structural divergence, coupled with Indian yarn's active shipments amid a wait-and-see market, reveals a shift from cost-driven to policy- and quality-driven dynamics in the imported yarn market.
Event Background
According to feedback from cotton yarn traders and weaving mills in Jiangsu, Zhejiang, Guangdong, and Fujian, over the past week or so, FOB/CNF/CIF quotes for cotton yarn from major exporting countries such as Vietnam, India, Pakistan, Indonesia, and Kazakhstan have generally risen slightly. Among them, OE yarn, low-count siro yarn, and compact siro yarn saw relatively larger increases, while quotes for 50S and above combed and carded yarn from India and Vietnam remained broadly stable, with foreign mills and exporters being cautious about raising high-count yarn prices. Meanwhile, 16-45S polyester-cotton blended yarn from Vietnam and Indonesia also edged up, driven by declining port inventories of blended yarn and rising raw material costs.
The direct driver of this round of price increases is the rise in international cotton prices. As the ICE cotton futures December contract broke through 82 and then 85 cents per pound, upward adjustments in both external and domestic quotes for imported yarn became more frequent. However, the price increase did not stimulate downstream buying; instead, it intensified the wait-and-see sentiment among weaving mills and fabric factories in coastal areas, slowing down inquiry and pickup activities. This situation of "quotes rising but transactions weak" reflects the market's limited acceptance of high-priced raw materials, which also caps further upside for imported yarn.
Notably, traceable cotton yarn also attempted to follow the upward trend, but downstream enterprises in some coastal areas of Jiangsu, Zhejiang, and Fujian reported insufficient new traceable orders, making it difficult to actually implement the increases. This indicates that despite strong cost support, weak demand is becoming the "ceiling" for imported yarn price hikes.
Industry Impact
Amid the overall wait-and-see atmosphere, Indian cotton yarn has shown rare activity. According to a light industry import-export company in Hangzhou, Zhejiang, apart from second- and third-tier brands and low-priced yarn which maintained barely acceptable sales, Indian medium-to-high-grade OE yarn and medium-count ring-spun yarn saw relatively active trading. Behind this phenomenon is the continuous significant rise in Indian domestic cotton prices—since mid-August, both India's S-6 spot quotes and CCI auction floor prices have risen notably, prompting some rigid-demand enterprises and yarn traders to lock in orders early for fear of sudden large FOB/CNF quote increases from Indian mills and exporters.
More noteworthy is the policy variable. From June 1 to October 31, 2026, India implements a phased tariff exemption policy on cotton imports. As a result, the proportion of US, Brazilian, and Australian cotton used by some Indian brands and large mills has increased significantly, improving yarn strength, CV value, and quality stability, which directly raised the attention of weaving and garment factories. In other words, Indian yarn is shifting from "low-price volume" to "quality with competitive price," which may be the fundamental reason for its active performance amid the wait-and-see market.
For domestic buyers, the combination of rising imported yarn prices and improved Indian yarn quality means that procurement strategies need to be more refined. On one hand, stable high-count yarn prices provide a relatively predictable cost expectation for high-end orders; on the other hand, the cost-performance advantage of Indian medium- and low-count yarn is re-emerging, especially during the tariff exemption window, where the quality dividend from upgraded cotton blending should not be ignored. However, it is important to be alert that if ICE cotton continues to rise, Indian yarn quotes may catch up, further increasing procurement costs.
From the perspective of industry chain transmission, the rise in imported yarn prices will eventually be reflected in the export quotes of domestic fabrics and garments. The current shortage of traceable orders indicates that overseas brands remain cautious about the recovery of end-consumer demand, which may limit the downward transmission of upstream price increases. Therefore, foreign trade enterprises need to fully consider raw material cost fluctuation risks when taking orders to avoid eroding profits due to delayed quotes.