China Customs data for May 2026 shows total cotton yarn imports reached approximately 172,200 tons, down 14.03% month-on-month. Yet within this seemingly tepid monthly data, Pakistani yarn stood out sharply—its import volume rose a marginal 0.01% month-on-month but surged 80.36% year-on-year. Against the backdrop of Vietnam and India—the two largest suppliers—falling 11.83% and 29.38% respectively, Pakistani yarn was the only major source to post growth.
What does this divergence mean? For domestic weaving mills, the procurement window for low-count yarns is undergoing a structural shift. Inquiries and transactions for open-end spun yarn (especially low-count varieties) have continued to slow, with FOB/CNF quotes from Vietnam and Indonesia already showing modest corrections. Meanwhile, demand for Pakistani 8S-21S siro-spun yarn remains robust. In a context of falling volumes and prices, the question of who is filling the gap and who is retreating is becoming increasingly clear.
Background
The surge in Pakistani yarn imports is driven by multiple converging factors. First, geopolitical tensions—the US-Israel-Iran conflict—have redirected some low-count, low-margin textile orders from Southeast Asia back to China. These orders are highly cost-sensitive, and Pakistani yarn fills the gap perfectly. Second, the Pakistani rupee's continued depreciation against the US dollar directly enhances the price competitiveness of Pakistani yarn. With improved energy supplies, mill operating rates have risen, further boosting export pressure.
Notably, the cotton yarn trade between China and Pakistan is evolving from a one-way flow to a two-way street. Weak domestic demand in Pakistan is forcing mills to increase exports, while Chinese weaving mills increasingly recognize the advantages of stable cotton blending and shorter shipping times for Pakistani yarn. Traders in Guangdong, Jiangsu, Zhejiang, and Shandong report that despite sluggish overall inquiries for bonded and forward open-end yarn, Pakistani siro-spun yarn shipments remain strong, indicating sustained downstream demand.
Industry Impact
This trend hits Vietnamese and Indian mills hardest. Vietnam, China's largest cotton yarn supplier, saw a 11.83% month-on-month decline in May, with its market share falling from recent highs. Indian mills face even greater pressure, with a nearly 30% sequential drop. The price corrections in open-end yarn from both countries are essentially a passive response to Pakistani price competition. But Pakistan's advantages go beyond exchange rates—stable cotton blending, a focused product range in low-count varieties, and shorter transit times create hard-to-replicate barriers.
For domestic weaving mills, this presents both opportunity and challenge. The opportunity lies in potentially lower procurement costs, especially for 8S-21S siro-spun yarn used in home textiles, denim, and low-count fabric production. The challenge is supply chain concentration risk—over-reliance on a single source could lead to disruptions during price swings or policy changes. A Zhejiang-based textile import-export company has already stated it is holding cash, waiting for the right moment to replenish Pakistani yarn stocks, implying market optimism about the trend.
From a macro perspective, the dual decline in open-end yarn volume and price may signal a new adjustment cycle in the low-count yarn market. The anticipated July US tariff hikes under the Section 301 investigation, coupled with the delayed start of domestic winter-spring orders, are keeping market sentiment cautious. However, Pakistani yarn's counter-trend growth shows that even in a weak demand environment, structural opportunities exist.