Indian cotton yarn exports to China tripled in the first 10 months of the 2025-26 marketing year, pushing India's share of China's cotton yarn imports from 7 per cent to 21 per cent and fuelling record Indian cotton consumption, according to the US Department of Agriculture's (USDA) latest world market and trade update. The USDA said India's cotton consumption growth is being driven by cotton yarn demand from China and cotton product demand from developed countries.
China-bound yarn shipments at record pace
The USDA reported that India's cotton yarn exports to all markets rose 8 per cent so far this marketing year, as a sharp rise in exports to China was partially offset by a reduction in exports to Bangladesh. "India's cotton yarn exports to China tripled in the first 10 months of the marketing year and market share rose from 7 to 21 per cent," the USDA said. China's overall yarn imports increased over the same period, but India's growth far exceeds that of other major suppliers because its exports benefited from a depreciating rupee and falling yarn prices.
Sharad Khemka, Managing Director of S.P.Yarns in Kolkata, a manufacturer and exporter of yarns, said Chinese buying of Indian cotton yarn has been significant this year because local prices in China are higher. "Yarn production is not viable in China due to higher prices," he said. China is still buying Indian yarn, though the recent increase in cotton prices in India has posed a challenge, he added.
Chinese demand has been mainly for coarser yarn counts such as 16s and 21s, which are thick threads used for heavy-duty home textiles and knitted fabrics, Khemka said. Vietnam has been a competitor for India in supplying the Chinese market; Pakistan supplied in the past, but India has now emerged as a major supplier in this category.
Dhiraj Khetan of Sri Salasar Balaji Agrotech in Hyderabad, a spinner and exporter, said cotton yarn exports have increased to countries such as China and Bangladesh this year. The Chinese are preferring to buy yarn compared with raw cotton because prices are cheaper in India, he said.
Consumption and import forecasts
The USDA said India's government removed duties on all imported cotton for more than six months in 2025-26 and for the first three months of 2026-27 to support the domestic textile industry. As a result of this policy and other supportive measures, Indian cotton consumption is forecast at a record 26.5 million bales in 2026-27, up from 26.0 million bales in 2025-26. The previous record of 26 million bales was reached in 2020-21 in the rebound from Covid-19 closures in the previous marketing year.
India's cotton imports are forecast at a record 4.8 million bales of 480 pounds each in 2025-26 (August 2025 – July 2026) and 3.0 million bales in 2026-27, the USDA said.
Global balances
Global cotton production is forecast up nearly 400,000 bales to 117.6 million in 2026-27, as larger crops in Brazil, Greece, and Türkiye more than offset a smaller crop in the United States, according to the USDA. Global consumption is forecast to rise nearly 1.0 million bales to reach a six-year high of 122.9 million, as higher consumption in China, India, Indonesia, and Vietnam more than offsets lower consumption in Bangladesh and Egypt.
| Metric | Forecast |
|---|---|
| India cotton imports 2025-26 | 4.8 million bales (480 lb each), record |
| India cotton imports 2026-27 | 3.0 million bales |
| India cotton consumption 2025-26 | 26.0 million bales |
| India cotton consumption 2026-27 | 26.5 million bales, record |
| Global production 2026-27 | 117.6 million bales (+400,000) |
| Global consumption 2026-27 | 122.9 million bales, six-year high (+1.0 million) |
Cotton prices ease after uptrend
Cotton prices, which were on an uptrend in the past few days, eased Thursday around 2 per cent on the ICE market, influencing domestic prices. "The market is easy as resellers and MNCs are active and have reduced the prices by around ₹500 per candy (356 kg)," said Ramanuj Das Boob, a sourcing agent in Raichur. "Going ahead the overall demand may ease amidst expectations of the new crop arrivals."
The interplay between Chinese yarn buying, the rupee's depreciation, and India's duty-free cotton import window will remain the key variables for domestic spinners and exporters as the USDA's forecasts point to a sixth consecutive year of consumption growth for Indian cotton.
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