The wave of rising imported cotton yarn prices is meeting with cautious resistance from Chinese buyers. In mid-May 2026, FOB/CNF/CIF offers from major origins such as Vietnam, India, and Pakistan generally increased, but coastal fabric mills and traders refrained from chasing prices, instead intensifying their wait-and-see approach.
The Divergence Between Cost Push and Weak Demand
The direct driver of this price hike is ICE cotton futures hitting a two-year high in early May, combined with sustained increases in oil, natural gas, and electricity costs, as well as consecutive sharp rises in Indian domestic cotton prices. These factors collectively pushed up production costs for cotton yarn exporters in Vietnam, India, Pakistan, Uzbekistan, Malaysia, Indonesia, and Bangladesh. Notably, even for relatively sluggish segments like open-end and low-count ring-spun yarn, offers were raised to varying degrees, reflecting strong bullish sentiment among sellers.
However, cost pass-through is not smooth. According to feedback from a major Zhejiang-based light textile import-export company, some overseas mills have suspended or even halted cotton yarn quotations, particularly reducing bookings for far-month shipments. Yet, coastal Chinese fabric mills and traders, grappling with surging costs and limited absorption capacity, are purchasing cautiously. This divergence—sellers withholding supply and buyers waiting—is compressing transaction volumes.
Stricter UFLPA Enforcement Adds Uncertainty
Another critical factor influencing purchasing decisions is policy risk in the export market. Since mid-April, US Customs has adjusted its inspection methods under the Uyghur Forced Labor Prevention Act, significantly increasing the number of batches inspected, with textile and apparel products accounting for a larger share. This has directly slowed the growth of orders destined for the US and EU markets and increased operational difficulties for exporters. For imported yarn users reliant on processing trade, traceability requirements further narrow procurement options, making them more cautious about cargoes without complete supply chain documentation.
Port Inventories: Slight Decline but Elevated Levels
On the inventory front, total port stocks of cotton yarn have edged down over the past half-month. While spot sales of Vietnam and Indonesia polyester-cotton yarn have been relatively acceptable, arrivals and warehousing of Indian, Pakistani, and Uzbek yarn have decreased slightly compared to April. However, it is important to note that current port inventories remain significantly higher than the same periods from 2022/23 to 2024/25, indicating that earlier supply pressure has not been fully digested. Without a substantive recovery in demand, high inventories will continue to cap price upside.