What Moves Fiber Prices: Cotton, Polyester and Viscose

Why fiber prices matter to a fabric buyer

Fiber is the raw material at the very start of the chain. A spinning mill turns it into yarn, a weaver turns the yarn into greige (unfinished cloth straight off the loom), and a process house dyes and finishes the greige into the fabric you buy. Every stage buys from the one before it, so when fiber gets dearer or cheaper, the change eventually reaches your quotation.

You do not need to forecast fiber markets to buy fabric well. You need to know which forces move which fiber, so that when a supplier says "cotton is up" or "polyester has eased" you can judge whether that should touch your fabric at all. A 100 percent polyester suiting does not care much about the monsoon. A cotton shirting does. If you are new to the fibers themselves, the glossary covers cotton, polyester staple fiber and viscose.

Cotton: a crop that answers to the weather and the state

Cotton grows on a plant, so its supply is decided in the field. In India most cotton is sown in the kharif season, the summer crop that relies on the monsoon. A good, well spread monsoon tends to mean a bigger crop. A weak or badly timed one can cut yields or damage quality. Before the rain even arrives, sowing area matters. This is how many hectares farmers choose to plant with cotton instead of a competing crop. It depends on what cotton fetched last season and what other crops pay.

The government also plays a part. It announces a minimum support price (MSP) for cotton each season, a floor meant to protect farmers. When market prices fall towards that floor, the Cotton Corporation of India (CCI), a state agency, buys cotton at MSP. That buying puts a soft floor under the market. Later, when CCI sells its stock, the timing and pace of those sales can also affect prices.

• Monsoon: rainfall amount and timing shape yield and quality.
• Sowing area: more land under cotton usually means more supply.
• MSP and CCI buying: a support floor and a large state buyer and seller.
• Global stocks: cotton trades worldwide, so big crops or shortfalls abroad pull Indian prices along, often seen through ICE cotton futures.
• Import duty: when duty applies, imported cotton costs more at the border; when it is waived, cheaper foreign cotton can cap local prices.

Polyester: a cousin of crude oil

Polyester is made in a factory from petrochemicals. Crude oil is refined into feedstocks that become two raw materials: PTA (purified terephthalic acid) and MEG (mono ethylene glycol). These are reacted together, melted, and extruded into fiber. So the first thing that moves polyester is crude oil, and then the separate markets for PTA and MEG, which do not always move in step with crude.

Capacity (how much the factories can produce) is the second force. Polyester plants are huge and take years to build. When a lot of new capacity starts up across Asia, supply can outrun demand and prices soften. When plants shut for maintenance or demand jumps, prices firm up. Trade remedies are the third. An anti-dumping duty is an extra duty a government places on imports it finds are being sold below fair value. Such duties, on the fiber or on PTA and MEG, raise the cost of imports and can lift local prices.

Viscose: wood pulp and a small number of makers

Viscose is a regenerated cellulose fiber. It starts as dissolving pulp, a highly purified wood pulp, which is dissolved in chemicals and pushed through fine holes to re-form as fiber. The cost of that pulp is the biggest single input, and pulp has its own world market tied to forestry and paper demand.

Viscose is also made by only a few large producers worldwide. A concentrated market means prices tend to be set by producer announcements rather than by thousands of daily trades. They can move in steps rather than drift slowly. Demand from apparel, especially in the big spinning countries, is the other factor. When blended fabrics sell well, viscose prices firm up. Because viscose sits in so many poly-viscose uniform and suiting fabrics, this is the fiber to watch if you buy PV. The ratios lesson shows how much viscose a typical blend carries.

Currency, freight and policy: forces on all three

Some forces press on every fiber at once. The first is currency. Cotton, crude, PTA, MEG and pulp are largely priced in US dollars worldwide, so when the rupee weakens against the dollar, imported inputs cost more in rupees even if the dollar price has not moved. When it strengthens, the opposite happens.

The second is freight. Ocean freight and container rates feed into the cost of imported fiber, pulp and petrochemicals, and sudden jumps in freight can raise the final delivered cost (landed cost) quickly. The third is policy: import and export duties, anti-dumping duties, quality control orders that restrict which fiber can be imported, and farm support all change the cost or availability of a fiber, often with little notice. For how those shocks are shared in a contract, see who pays when duty, freight or fiber costs move.

The price chain: how a fiber move reaches your fabric

A fiber move does not land on finished fabric in full. At each stage, other costs are added: a spinning mill adds power, labour and the cost of the count it spins; a weaver adds loom time and labour, as the loom lesson explains; a process house adds dyes, chemicals, water and energy. Fiber is only one share of the final cost, so a sharp change in fiber shows up as a smaller change in finished fabric.

It also arrives later. Spinners hold fiber stock, weavers hold yarn, process houses hold greige. A rise in fiber is felt first by whoever buys fresh fiber. It takes weeks or months to work through older, cheaper stock down the chain. The same lag applies on the way down, which is why fabric rarely falls the day a fiber headline does.

At Benny Cotts we do not spin yarn or make fiber. We buy yarn, weave in-house at Village Atoon in Bhilwara, and send greige to partnered Bhilwara process houses for dyeing, processing, finishing and testing. So fiber reaches us through the yarn price, one step removed.

What this means when you buy

• Know your fiber mix. A 65/35 poly-viscose cloth is affected by changes in polyester and viscose prices. A cotton shirting is affected by changes in cotton prices. Check the blend on the spec sheet.
• Expect lag in both directions. Do not expect a fabric price to track a daily fiber headline.
• Plan big programs early. Fixing quantities ahead of peak season gives your supplier time to buy yarn at a known cost; the annual planning guide shows how.
• Ask how long a quote holds. Validity periods exist because input costs move; read more in understanding fabric quotations.

Next in this module: Blends compared: poly-viscose, poly-cotton, cotton and polyester, which puts the four fibers you have just met side by side. When you are ready to see the cloth, Request Catalog from our quote page.

FAQ

Frequently asked questions

Why did my fabric price change when the fiber price has not moved this month?

Because fabric prices respond to the fiber, yarn, dyeing and energy costs of the stock actually used, which was often bought weeks or months earlier. Currency, freight, power and dye costs can also move independently of fiber. A quote reflects the whole chain, not one headline.

Does a fall in crude oil make polyester fabric cheaper straight away?

Not straight away, and not by the same proportion. Crude feeds PTA and MEG, which have their own supply and demand, and polyester fiber then passes through spinning, weaving and finishing. Any change is diluted at each stage and arrives with a lag as older stock is used up.

What is MSP and why does it matter for cotton fabric?

MSP, the minimum support price, is a floor price the government announces for cotton each season to protect farmers. When market prices fall to that level, the Cotton Corporation of India buys at MSP, which keeps a soft floor under raw cotton and therefore under cotton yarn and fabric.

Which fiber's price should I watch if I buy poly-viscose uniform fabric?

Both polyester and viscose, in proportion to the blend. In a 65/35 cloth, polyester is the larger share by weight, so crude, PTA and MEG matter most, but viscose often costs more per kilo than polyester, so pulp and viscose producer pricing matter too. Cotton markets barely touch it.

Can a supplier lock a fabric price for a whole year?

Some will for a fixed quantity and delivery schedule, usually with a clause covering large moves in duty, currency or fiber. Others quote for a shorter validity. Ask what the quote assumes and how long it holds, and agree in writing what happens if inputs move sharply.