China's cotton yarn imports fell 14% month-on-month in May 2026 to 172,200 tons, but Pakistani yarn bucked the trend with a 80.36% year-on-year surge to 21,310 tons. In contrast, imports from Vietnam and India dropped 11.83% and 29.38% respectively, signaling a clear shift in market dynamics.
Three Drivers Behind Pakistan's Surge Pakistani yarn's strong performance is no coincidence. First, the Pakistani rupee's sustained depreciation against the US dollar has directly lowered dollar-denominated export prices, giving it a clear edge in the price-sensitive low-count yarn segment. Second, weak domestic demand in Pakistan has forced mills to redirect capacity to exports, creating supply pressure. Third, the China-Pakistan cotton yarn trade has evolved from one-way flow to two-way synergy, with industrial chain coordination increasingly evident.
Notably, some low-margin apparel orders from Southeast Asia have returned to China due to geopolitical tensions in the Middle East, further boosting demand for Pakistani yarn, which offers superior cost-effectiveness for these orders.
OE Yarn Market: Volume and Price Decline In contrast, the OE (open-end) yarn market is suffering from simultaneous volume and price declines. Feedback from weaving clusters in Guangdong, Jiangsu, Zhejiang, and Shandong indicates that inquiries and transactions for bonded and forward OE yarn have slowed significantly. FOB/CNF/CIF offers from Vietnam, Indonesia, Malaysia, and India continue to edge downward.
This reflects a gap in order cycles: the wave of transferred orders from Southeast Asia is winding down, while domestic winter-spring orders have yet to materialize. Combined with expectations of US Section 301 tariff hikes, importers and mills are staying on the sidelines, actively destocking rather than replenishing.
Resilience of Siro Spun Yarn Within this weak OE yarn environment, Pakistani 8S-21S siro spun yarn shipments remain relatively stable. This suggests that Pakistani yarn has built a category moat in low-count yarns. Siro spun yarns are essential for denim and workwear fabrics, and Pakistani yarn offers advantages in cotton blending consistency and transit time—shorter shipping routes from Pakistan to Chinese ports than from Southeast Asia, enabling faster response orders.
A Zhejiang-based textile import-export company confirms this: Pakistani cotton prices corrected sharply in mid-June, while mill operating rates recovered as energy supplies improved, increasing export pressure. This implies further room for FOB price declines, opening a procurement window for buyers waiting to restock.