In May 2026, China's total cotton yarn imports fell 14% month-on-month, yet imports from Pakistan surged over 80% year-on-year, sharply contrasting with the sluggish performance of yarn from Vietnam and India. This structural shift is driven by currency fluctuations, geopolitical order transfers, and adjustments in domestic demand.
Total Imports Contract, Pakistan Yarn Breaks Out
Customs data shows China imported about 172,200 tons of cotton yarn in May, down 14.03% month-on-month but up 71.75% year-on-year. Vietnam and India, traditional import leaders, saw imports of 82,050 tons and 22,430 tons, down 11.83% and 29.38% respectively. Pakistan's imports reached 21,310 tons, up 0.01% month-on-month and 80.36% year-on-year, indicating a subtle shift in China's import structure as Pakistan gains market share.
Industry analysts attribute this growth to several factors: the US-Israel-Iran conflict has redirected some Southeast Asian low-to-mid-count yarn orders back to China, benefiting Pakistan as an alternative supplier; the depreciation of the Pakistani rupee enhances export competitiveness; weak domestic demand in Pakistan pushes mills to export more; and bilateral trade facilitation eases market entry.
Open-End Spinning Under Pressure, Prices and Demand Decline
Unlike Pakistan's strong performance, the open-end spinning yarn market faces a dual decline in volume and price. Feedback from weaving mills and yarn traders in Guangdong, Jiangsu, Zhejiang, and Shandong indicates that Southeast Asian order transfers are winding down, and domestic autumn-winter orders have yet to materialize, slowing inquiries and transactions for bonded and forward open-end yarn. FOB/CNF/CIF prices from Vietnam, Indonesia, Malaysia, and India continue to edge lower.
This weakness is also linked to concerns over potential US tariff increases in July based on the Section 301 investigation, which dampens importers' willingness to purchase. In contrast, Pakistan's 8S-21S siro yarn shipments remain relatively stable, showing resilience in the low-to-mid-count segment.
Pakistan Cotton Prices Drop, Mill Capacity Recovers
A Zhejiang-based textile import-export company reports that Pakistan cotton prices have fallen sharply since mid-June, while easing energy and power shortages have boosted mill operating rates. This suggests increased export capacity but also greater pressure on mills to sell. Given the medium-to-long-term depreciation trend of the rupee against the dollar, buyers are waiting for the best opportunity to restock Pakistan yarn.
This presents an opportunity for buyers. Pakistan yarn offers stable cotton blending, and geographic proximity reduces transport costs and lead times. With cotton prices declining, Pakistan's cost advantage will further strengthen, likely attracting more Chinese buyers.