China's total cotton yarn imports dropped 14% month-on-month in May 2026, but Pakistani yarn imports surged over 80% year-on-year to nearly 21,300 tons, defying the broader downturn. This structural shift signals a reshaping of the imported yarn market.
Structural Divergence Amid Volume Decline
According to China Customs data, May cotton yarn imports totaled 172,200 tons, down 14.03% from April but up 71.75% year-on-year. Vietnamese yarn accounted for 82,050 tons (47.63%), down 11.83% month-on-month; Indian yarn dropped 29.38% to 22,430 tons (13.02%). In contrast, Pakistani yarn reached 21,310 tons (12.37%), a marginal 0.01% monthly increase but an 80.36% year-on-year surge.
Industry insiders attribute this divergence to the spillover effect of Southeast Asian low-to-mid count yarn orders returning to China, partly driven by the U.S.-Israel-Iran conflict disrupting supply chains. Pakistan, as a key yarn supplier to China, directly benefits from this re-routing.
Three Drivers of Pakistani Yarn Competitiveness
The Pakistani rupee's continued depreciation is the primary cost advantage. For dollar-holding buyers, the same amount buys more rupees, lowering FOB/CNF/CIF prices. Meanwhile, domestic cotton prices in Pakistan fell sharply in mid-June, and easing energy shortages raised mill operating rates, boosting export capacity.
Weak domestic demand is another factor. Pakistani textile consumption remains sluggish, forcing mills to offload inventory overseas. Additionally, the China-Pakistan trade agreement provides tariff benefits and logistics advantages for cotton yarn and fabric, giving Pakistani yarn an edge in fiber consistency and shipping speed over Southeast Asian rivals.
Open-End Spinning Under Pressure vs. Siro Spinning Resilience
Feedback from major weaving hubs in Guangdong, Jiangsu, Zhejiang, and Shandong shows slow inquiry and transaction activity for open-end (OE) yarn at ports and on forward contracts. Prices from Vietnam, Indonesia, Malaysia, and India continue to edge down, reflecting a volume-price double decline. This is due to the winding down of transferred orders from Southeast Asia and the delayed start of domestic winter-spring orders, creating a seasonal gap.
In contrast, Pakistani 8S-21S siro-spun yarn shipments remain steady. While competing with OE yarn in the low-to-mid count segment, siro-spun yarn offers better evenness and strength, making it preferred for certain fabric applications. For mills, the stability of siro-spun yarn becomes a plus amid OE yarn price corrections and quality fluctuations.
Market Outlook and Procurement Window
A Zhejiang-based textile trading firm expects Pakistani cotton prices to fall further, with the rupee's depreciation trend unlikely to reverse soon, sustaining the cost advantage. The period from late June to July could be a restocking window for buyers holding cash. However, the potential U.S. tariff hike under Section 301, possibly in July, poses a risk that could disrupt the entire imported yarn market.