China imported 172,200 tons of cotton yarn in May 2026, down 14.03% month-on-month but up 71.75% year-on-year, according to customs data. Behind this headline figure lies a more telling shift: Pakistani yarn is rapidly capturing market share from Vietnamese and Indian yarn, especially in air-jet and siro-spun segments.
The Logic Behind Pakistani Yarn's Surge
Imports from Pakistan reached 21,310 tons in May, essentially flat month-on-month but soaring 80.36% year-on-year. In contrast, Vietnamese yarn imports fell 11.83% to 82,050 tons, and Indian yarn plunged 29.38% to 22,430 tons. Pakistan was the only major source to record positive month-on-month growth.
This divergence is no coincidence. The continuous depreciation of the Pakistani rupee against the US dollar has directly lowered the dollar-denominated cost of its yarn exports. Meanwhile, easing energy and power shortages in Pakistan have boosted mill operating rates, further compressing export prices. Concurrently, geopolitical tensions in the Middle East have redirected some low-margin, low-count textile orders from Southeast Asia back to China, orders that are highly cost-sensitive and align well with Pakistani yarn pricing.
Air-Jet Spinning Under Dual Pressure
In contrast, the air-jet spun yarn market is experiencing both volume and price declines. Feedback from weaving mills and yarn traders in Guangdong, Jiangsu, Zhejiang, and Shandong indicates sluggish inquiries and transactions for both bonded and forward cargo. FOB/CNF/CIF offers from Vietnam, Indonesia, Malaysia, and India have been edging lower.
Three factors explain this: first, the wave of orders redirected from Southeast Asia is winding down, while domestic winter-spring orders have yet to materialize, creating a demand gap. Second, market expectations of US tariff hikes under Section 301 are prompting buyers to stay on the sidelines. Third, air-jet yarn's thin margins make traders eager to destock amid raw material cost volatility and end-user price pressure.
Pakistani Yarn's Structural Advantages
Pakistani yarn also benefits from relatively stable cotton blending. Unlike Indian or Vietnamese yarn, which is more exposed to price swings in US or West African cotton, Pakistani yarn relies mainly on locally grown cotton, ensuring consistent quality for low-count applications. This consistency is a hidden advantage for weaving mills requiring batch uniformity.
Moreover, China-Pakistan trade in cotton yarn and fabric has become a 'two-way street': China is the largest buyer of Pakistani yarn, while Pakistan is a key market for Chinese cotton fabric. This complementarity reduces transaction costs and enhances logistics efficiency.
Price Outlook: A Window for Restocking
A Zhejiang-based textile trading company noted that Pakistani cotton prices have corrected sharply since mid-June, mill operating rates are recovering, and export pressure is building. With the rupee expected to weaken further against the dollar, many traders are waiting for the right moment to restock.
This suggests that Pakistani yarn FOB quotes still have room to fall in the next 1-2 months. For weaving mills needing 8S-21S siro-spun yarn, now may be a favorable window to build safety inventory.