I'm all the way through the Quest lines through Lunden and so far I've only found 2 pieces of Fabric making it impossible to upgrade my arrows or health and it's getting kind of annoying especially with the arrows that are way too limited to begin with
Hello there!
Thanks for sharing your experiences with collecting fabric in-game, @TheNorfolkian & @Kormac67! I'm glad that you've been able to find more fabric within small chests as you've explored more of England, @longjohn119 
As shared by @Kormac67, you can also purchase additional fabric from Yanli once you have reached Settlement Level 6, if you are still requiring it for upgrades or altars.
I'd like to take a closer look at your excess fabric, @TheNorfolkian. Would you be able to send some screenshots or a short video which shows the following:
We can then forward this to the development team to check if you should be able to collect more than the required amount of fabric.
Thanks! 
Hey @kormac67,
It's interesting to hear that you are also reporting surplus drops of fabric. Could you possibly do as @Ubi-Borealis has requested above, and provide us with screenshots or a short video clip showing the following:
We can then have the development team look into this and confirm if it's an intended change following the previous issues that were experienced with fabric not dropping reliably. Thanks! 
@kormac67 Thanks for the images provided. As Ubi-Borealis previously mentioned, if there are no smaller chests remaining on your map then you can purchase fabric from Yanli at your settlement once it has been upgraded to level 6
You should then be able to purchase enough to complete the offering at the altar.
@kormac67 Ah yes apologies, it was the anomaly icon on the map not the altar offering, I can see that now.
I'm pleased you were able to collect enough fabric to complete the altar offering along with your rations and quiver upgrades 
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