AEPC Calls on Commerce Minister to Implement Regulations for Cotton Yarn Exports

Cotton yarn prices have surged recently, experiencing an increase of approximately 60% from around ₹250 per kg in early 2026 to roughly ₹400 per kg currently. This dramatic rise is causing significant strain on the apparel manufacturing value chain, prompting the Apparel Export Promotion Council (AEPC) to call for regulatory measures on cotton yarn exports, particularly those with a count of 20s and above. The rising costs are not isolated to yarn alone; they are also being fueled by escalating expenses for other raw materials and fuel, creating a compounded effect on production costs.

The primary drivers behind this price hike include a combination of heightened demand from apparel-producing countries such as Bangladesh and Vietnam, exacerbated by the United States’ restrictions on Chinese cotton due to the Uyghur Forced Labour Prevention Act. These geopolitical factors have led to a shift in cotton supply dynamics, with significant quantities moving from farmers to traders, thereby facilitating hoarding and speculative practices in the market. Additionally, as the profitability of raw cotton remains modest at approximately ₹275 per kg, traders find incentive in higher-margin products like cotton yarn, which now commands around ₹325 per kg.

In the short-term, traders and investors should remain vigilant as the regulatory environment evolves. The AEPC’s appeals for government intervention may result in measures that could stabilize or potentially lower cotton yarn prices, impacting the overall market sentiment. However, continued international demand and supply constraints may keep prices elevated. Retail investors should prepare for volatility while assessing their exposure to the apparel sector, as margins for manufacturers may be compressed amidst these ongoing pricing pressures.

Source: Market Source

(Expert Note: This report was independently prepared by the Wealthova Commodities team.)