India’s cotton yarn prices surge 60% as arrivals shrink and garment costs rise
Indian cotton yarn prices have risen about 60% in 2026, while cotton is more than 28% higher, according to Business Standard Hindi. Apparel producers warn that clothing prices could increase by 5%-20% during the festive season as limited stocks and strong demand raise manufacturing costs.
Yarn rises from ₹250 to ₹400 per kilogram
India’s cotton market is sending sharply different signals through the textile and processing chain. Cotton and cotton yarn prices are climbing as arrivals decline and stocks tighten, while separate market updates indicate falling prices for cottonseed cake and washed cotton oil. The divergence is increasing pressure on spinning mills, garment producers and exporters even as some cotton-processing byproducts weaken.
Business Standard Hindi reported that cotton yarn has become about 60% more expensive in 2026, while cotton prices have risen by more than 28%. According to the Apparel Export Promotion Council, or AEPC, yarn that cost about ₹250 per kilogram at the beginning of 2026 is now priced near ₹400 per kilogram. Higher costs for other raw materials and fuel are adding to the pressure across the manufacturing chain.
Limited stocks increase reliance on CCI auctions
The Cotton Association of India placed the domestic price of Shankar ICC-150, 28-count cotton at ₹19,065 per quintal, compared with ₹14,875 per quintal a year earlier. During the current monsoon season, international cotton prices have risen by about 19%, while domestic S-6 cotton has gained about 18%, Business Standard Hindi reported.
AEPC says ginning mills hold limited cotton inventories and arrivals have decreased, leaving textile mills more dependent on auctions conducted by the Cotton Corporation of India. A large share of farmers’ cotton has moved into traders’ hands, raising industry concerns about stockpiling and speculation. Strong domestic and overseas demand for yarn is reinforcing the price increase.
Garment exporters seek controls on yarn exports
Garment prices could rise by 5%-20% during the festive season if yarn, raw-material and fuel costs remain elevated. AEPC chairman A. Sakthivel asked Commerce Minister Piyush Goyal to consider measures controlling exports of cotton yarn, particularly yarn of 20 count and above, to protect the competitiveness of India’s textile export industry.
AEPC estimated raw cotton at about ₹275 per kilogram and cotton after conversion into yarn at about ₹325 per kilogram. Finished garments incorporating further value addition cost roughly ₹800-₹1,200 per kilogram. Garment exporters argue that India should prioritize exports of higher-value finished apparel rather than raw cotton or yarn, retaining more processing activity and employment at home.
Production outlook adds supply risk
India’s Ministry of Textiles estimates that cotton production will fall from 352.48 lakh bales in 2020-21 to 290.91 lakh bales in 2025-26. Separately, the New Delhi office of the US Department of Agriculture’s Foreign Agricultural Service forecasts 115 lakh hectares of cotton planting and production of 245 lakh bales in 2026-27, with each bale weighing 480 pounds. The two bale figures use the units stated by their respective sources and are therefore not directly comparable without conversion.
The USDA office expects average lint yield to decline by 2% to 464 kilograms per hectare. Below-normal monsoon rainfall, prolonged sowing and the risk of dry conditions in western and central India during September could further affect yields and total output. For mills and apparel companies, the combination of reduced arrivals, uncertain production and high yarn demand points to continued cost exposure, even while weaker cottonseed-cake and washed-oil prices limit returns from some processing byproducts.
