How’s imported yarn fare after Covid restriction end?

Ever since Covid restriction lifted, work from home is not uncommon. Many thought the first peak of infections would arrive before Spring Festival and 2023 would see a recovery of consumption. Besides, the exchange rate is currently maintained at a steady level since the Fed’s interest rate hike is basically coming to an end.

So what happened to the spread between imported yarn and China domestic yarn price?

Both Vietnamese and Indian ring-spun cotton yarn prices were higher than China domestic yarns, although the price gap for Vietnamese yarns was smaller. Pakistani cotton yarn had its price advantage for attracting new orders. Yet given the plunge of Indian cotton, Indian cotton yarn is expected to fall consequently. More orders would then pour into Indian market and a reduction in export would also influence cotton price.

If the spot price drop slows down, the price gap between imported Indian cotton yarn and domestic cotton yarn might narrow to a flat level, or even generate some margin, which would be a good news in anticipation of recovering domestic demand next year. But from the other hand, poor profit of imported yarn this year drove more traders to domestic yarn which got more competitive price. As a result, the anticipated volume of import yarn next year may not be very encouraging.