Cotton Is Expensive Again: What Uniform Buyers Should Lock Before 31 October

The relief lasted about two months

In our August post we described cotton easing on a policy decision: the removal of basic customs duty and cess on imported cotton from 1 June to the end of October 2026. That framing was right for June and July. It is not the picture in September.

Reporting dated 2 September 2026 from the Coimbatore spinning belt has cotton on an ex-gin basis at a multi-year high, roughly a quarter to a third above the range it held from October 2025 to the end of March 2026. Domestic prices are now moving in step with ICE futures rather than with the import duty. The exemption is still in force. It has simply stopped being the lever that sets the price.

Three levers, none of them domestic policy

The Southern India Mills' Association put the demand side plainly: cotton yarn demand began recovering around five months ago, spinning capacity utilisation has crossed ninety percent, and mills are not holding much yarn. Most are also carrying less than two months of cotton. That combination, thin fibre stock and thin yarn stock at the same time, is why a raw cotton move now reaches yarn quotes within weeks rather than a season.

The Indian Cotton Federation named the supply side: higher demand from China and lower expected crops in the United States and China. The Cotton Textiles Export Promotion Council added the third lever, that Indian yarn cannot be absorbed by domestic apparel alone and is being sold into an international market where yarn is also short. The apparel exporters' council said the same thing from the other direction on 29 August, citing strong yarn exports to Bangladesh and Vietnam and asking the government to regulate exports of 20s count and finer.

Put together: Chinese fibre demand, a weaker US and Chinese crop, and Indian yarn exports. A customs exemption on imported cotton touches none of them. It lowers the landed cost of foreign cotton, but when the foreign price is itself the thing rising, the exemption only stops Indian cotton from being dearer than the world, it cannot make it cheaper than the world.

The volume gap the exemption was meant to close, and why closing it did not hold the price

The section above makes that argument without numbers, so here are the numbers, because the obvious buyer question deserves them: if a duty was removed specifically to relieve a cotton shortage, why did the price keep climbing? Reporting from the Coimbatore belt dated 8 September 2026 sets out the arithmetic. Last season's Indian cotton requirement was put at 350 lakh bales, about 35 million, against current domestic production of 290 lakh bales, about 29 million. Against that shortfall the eleven percent import duty was removed and 62 lakh bales, about 6.2 million, were imported. Cotton prices rose anyway.

That is the clearest evidence available for the point made above. Imports arrived at close to the scale the gap required and still did not set the price, because the price was being set in the export market rather than at the Indian border. The same reporting has the Confederation of Indian Textile Industry attributing the volatility to a genuine recovery in global yarn demand: demand muted since 2023-24, picking up from last December, mills having run hand-to-mouth stocks through the lean years, and fresh yarn buying from China and Bangladesh arriving on top of domestic garment growth. Thin stock meeting recovering demand is a price move no customs concession can absorb.

The futures track in that reporting matches what we read independently, which is worth stating because it is two routes to one answer. Cotton futures are described there as having reached 92 US cents a pound and corrected to about 86. ICE cotton on 10 September 2026 sat in the high eighties, easing from a more than two-year high as traders took profits, while still holding roughly a third above where it was a year earlier. Same shape from both routes: a correction inside an up-trend, not a reversal of it.

One part of that reporting is deliberately not used here. A regional exporters' association has asked the central and state governments to ban cotton exports, and alleges that certain large domestic spinning mills and traders have restricted supply since January. That is an allegation by one trade body against unnamed domestic firms, with no finding by any authority behind it, and we will not repeat it as fact. We record only that an export ban has been demanded, because a buyer who reads about one should know it is a demand and not a policy.

What changes at the end of October

Two dated facts sit close together. The duty exemption on raw cotton runs up to and inclusive of 31 October 2026 under Customs Notification 19/2026, dated 30 May 2026. And Cotton Corporation of India procurement under the raised 2026-27 minimum support price begins with the new season from 1 October. From November the domestic price base is the new-crop MSP plus whatever premium a tight market adds, with an eleven percent duty back on the import alternative.

Industry sources quoted in the same reporting expect CCI, which holds a large quantity of cotton procured under MSP, to stabilise domestic prices. That is an expectation about a public body, not an announced programme. Treat it as a watch item for October, not as a reason to delay a decision.

The new crop is not arriving on schedule to fill that gap either. Reporting on 3 September 2026 put combined cotton acreage in Punjab, Haryana and Rajasthan about 23 percent below last year, with Punjab down roughly 37 percent, after whitefly and pink bollworm damage and falling yields pushed growers to other crops. Knitwear and hosiery associations in Tiruppur, quoted on 2 September, expect domestic arrivals about 40 days late, in November rather than October, and say the duty exemption has not yet brought the relief it was meant to. Those are reported figures, not our forecast, but they mean the weeks between the exemption lapsing and new cotton arriving in volume are the weeks a November delivery is being priced in.

We are not forecasting November cotton. The narrower point holds: a cotton or poly-cotton quote given in September is priced off an exemption that expires and a crop that has not yet been procured. Both of those resolve in the next eight weeks, and neither resolves downward on the current evidence.

What this does to a uniform fabric quote

• Cotton-rich and poly-cotton shirting: expect shorter validity windows. A mill holding under two months of fibre cannot honour a ninety-day price, and a short window is honest information, not pressure. Our post on why quotes carry a validity window explains what to ask for instead.
• Poly-viscose suiting and shirting: nothing in this post applies to your quote. PV traces back to crude-linked polyester and pulp-based viscose, covered in our polyester price post. If a supplier reprices PV citing cotton, ask them which input moved.
• Do not switch fibre on a headline. The differences between cotton, poly-cotton and poly-viscose in a school or hospital laundry are set out in our fibre comparison guide, and a fibre chosen for a market reason is still judged on shrinkage, fastness and pilling two years later.
• If a programme is confirming for the coming academic year, the annual purchase planning guide applies: fix the specification first, then take a price when the window suits you, and ask explicitly whether a cotton-content price assumes the current exemption.
• Cotton-content orders that can be confirmed before the end of October are priced under known rules. Orders that slip into November are priced under rules nobody has seen yet. That is the whole planning point.

Where we stop

There are no price figures in this post, for cotton, yarn or our own fabric, and that is deliberate. The direction and the percentage range above are derived from reporting dated 2 September 2026 in a national daily quoting SIMA, the Indian Cotton Federation and TEXPROCIL, and from the apparel exporters' council statement reported on 29 August 2026. Policy dates come from the customs notification as reported at the end of May 2026. Trade and press reporting is not government data; if a commercial decision rests on any of it, verify at source first.

The follow-up to this post is due when the exemption lapses. We will write it once the outcome is known, not before.