The price gap between imported and domestic cotton yarn is being repriced, and this shift matters more than the headline quote movements. Public industry data shows that since late August, ICE cotton futures have undergone a sharp correction, while cotton prices in India and Pakistan declined consecutively in early September. FOB and CNF quotes for cotton yarn from Vietnam, India, Pakistan, Indonesia and Uzbekistan have generally softened. Notably, open-end yarns and coarse-count ring-spun yarns saw steeper cuts than carded yarns of C32S and above, as well as medium-to-high count combed yarns. Indian JC60S and JC80S, constrained by scarce bonded and shipment offers and persistently high costs, remained weak but stable. This divergence is no accident; it directly reflects differing supply-demand elasticities across yarn counts.
Cost Transmission Behind the Softening Export Market
From the origin perspective, the cost side for Southeast Asian mills is loosening in tandem. Renewed volatility in crude oil and natural gas prices, along with heightened uncertainty in shipping and trade flows, is constraining order intake and exports of cotton products from Southeast Asian countries. Some large-scale branded mills in Vietnam, India and Pakistan were the first to cut export quotes, forcing second- and third-tier brands to follow. This means the downward move in export quotes is not driven by a single factor but by the simultaneous weakening of cost expectations across raw materials, energy and logistics. For buyers, the window of softening export quotes tends to be shorter than expected; once raw material prices stabilize, the mills that cut first may also be the first to restore quotes.
In cross-market comparison, Vietnamese OEC10S to 21S FOB and CNF quotes are slightly lower than those from India, Pakistan and Indonesia, giving them stronger competitiveness. Coastal enterprises in Guangdong, Fujian and Zhejiang, covering denim, knit underwear, knit sweaters, home textiles, corduroy and labor protection products, are paying noticeably more attention to Vietnamese low- to mid-count open-end yarn. The logic is straightforward: low- to mid-count yarns are more sensitive to raw material price swings, and once export quotes decline, their cost-performance advantage is quickly amplified. End products in these categories are mostly domestic-sales and short-lead-time orders, making them more responsive to marginal changes in yarn costs.
Widening Landed-Cost Advantage and Recovering Procurement
The domestic market is moving in clear contrast to the export market. With the arrival of the Golden September and Silver October peak season, domestic mills have accelerated destocking, and cotton yarn quotes have not followed Zhengzhou cotton futures or domestic spot cotton lower. A few large-scale mills even raised ex-factory prices for open-end yarn. This price-holding behavior has directly widened the landed-cost advantage of imported cotton yarn over domestic quotes. For weaving and fabric mills, when the cost advantage of imported yarn at the factory gate expands enough to cover shipping time and capital occupation costs, a sourcing shift becomes almost inevitable.
The current export order structure further reinforces this trend. Short, scattered and small orders still account for a high proportion, meaning factories dare not build large inventories and prefer small-batch, multi-frequency procurement. Under this order structure, the flexible replenishment advantage of imported yarn is amplified. Demand from coastal weaving, fabric and garment factories for low- to mid-count yarn from Vietnam, India, Pakistan and Bangladesh continues to recover, and spot trading sentiment is noticeably more active than before. However, it is worth noting that a widening landed-cost advantage is inherently unsustainable. Once domestic mills increase shipments late in the peak season, or export quotes rebound with raw materials, the price gap window could narrow quickly.
Transmission Judgment for the Supply Chain
Looking at upstream and downstream transmission, the current recovery in imported yarn procurement is more price-gap driven than a substantive expansion in end demand. Order increments in terminal apparel and home textiles are limited, and the high share of short and scattered orders indicates that brands are still controlling inventory risk. For domestic mills, the strategy of holding prices while destocking is effective in the first half of the peak season, but if imported yarn continues to squeeze the low- to mid-count market, shipment pressure on domestic open-end and coarse-count ring-spun yarn will concentrate at the tail end of the season. For traders, the current divergence in export quotes offers structural opportunities; the price gap space for low- to mid-count yarn is larger than for high-count yarn, but shipping and currency risks need to be hedged simultaneously.
Another variable worth watching is the offer situation for Indian high-count yarn. JC60S and JC80S, with scarce bonded and shipment resources and persistently high costs, are expected to remain weak but stable in the short term. This means import substitution space for high-count combed yarn is limited, and domestic high-count mills still have some buffer. But if Indian cotton prices continue to decline, a delayed catch-down in high-count export quotes may occur, and the impact on the domestic combed yarn market would be more direct.