According to the latest data from China Customs, total cotton yarn imports in May 2026 stood at approximately 172,200 tons, down 14.03% month-on-month. However, the structural divergence is striking: imports from Vietnam and India fell 11.83% and 29.38% month-on-month, respectively, while imports from Pakistan edged up 0.01% month-on-month and surged 80.36% year-on-year. This contrast signals that Pakistani yarn is aggressively capturing market share amid the overall decline in open-end spun yarn prices and volumes.
The Underlying Logic of Pakistani Yarn's Rise
The sustained competitiveness of Pakistani cotton yarn stems from multiple factors. First, the long-term depreciation of the Pakistani rupee against the US dollar directly reduces export costs, making the yarn more attractive in price-sensitive low-count markets. Second, weak domestic textile demand in Pakistan forces mills to redirect capacity toward exports. Third, the growing bilateral trade in cotton yarn and fabric between China and Pakistan, coupled with shorter transit distances and stable delivery cycles, gives Pakistani yarn a unique logistical edge.
Notably, the consistent cotton blending of Pakistani yarn is a hidden advantage. Unlike some Southeast Asian suppliers that suffer from raw material fluctuations, Pakistani mills maintain relatively uniform cotton recipes, meeting the increasingly stringent quality requirements of downstream weaving mills.
Structural Pain in the Open-End Spun Market
In contrast to Pakistani yarn's strong performance, the overall open-end spun market is undergoing a phase of adjustment. Feedback from major weaving clusters in Guangdong, Jiangsu, Zhejiang, and Shandong indicates that inquiries and transactions for both bonded and forward cargoes of open-end spun yarn have slowed significantly. Three reasons stand out: first, the transfer of orders from Southeast Asia to China is nearing its end, diminishing the temporary demand that had earlier boosted imports; second, domestic winter-spring orders have yet to be placed, leaving a traditional off-season gap; and third, growing concerns over potential US tariffs under Section 301 investigations have prompted importers to adopt a wait-and-see approach.
On the pricing front, FOB/CNF/CIF quotes for open-end spun yarn from Vietnam, Indonesia, Malaysia, and India have already seen modest declines, reflecting supplier pressure to destock. Meanwhile, shipments of Pakistani 8S-21S siro spun yarn have not weakened significantly, indicating that in the low-count segment, Pakistani yarn has established a relatively stable demand base driven by cost performance.
The Dual Game of Exchange Rates and Costs
The operational strategy of a Zhejiang-based textile import-export company is illustrative: the firm has explicitly stated it is waiting with cash in hand for an opportunity to replenish Pakistani cotton yarn stocks. Its rationale is twofold—cotton prices in Pakistan have dropped sharply since mid-June, easing mills' raw material cost pressures; and with energy and electricity supply constraints easing, local mill operating rates are rising, boosting export capacity. Given the ongoing depreciation trend of the rupee, the landed cost of Pakistani yarn is expected to decline further.
However, exchange rate volatility is a double-edged sword. For importers contracting in US dollars, rupee depreciation lowers procurement costs but introduces additional settlement risks. Balancing price advantages with settlement security is a key challenge for traders.