In May 2026, China's cotton yarn import market presented a striking data set: total imports dropped 14% month-on-month, yet imports from Pakistan surged over 80% year-on-year to 21,300 tons. This contrasts sharply with declines from traditional suppliers like Vietnam and India. Pakistan's rise is no coincidence—it results from a convergence of currency, capacity, and geopolitical trade factors.
Pakistan's Resurgent Competitiveness: Currency and Capacity
The long-term depreciation of the Pakistani rupee against the US dollar is the core engine behind the competitiveness of Pakistani yarn. A weaker rupee directly lowers dollar-denominated export costs, making Pakistani yarn more attractive in the price-sensitive low-to-mid count market. Meanwhile, as energy and power supply crises ease, Pakistani mills have increased operating rates, boosting export supply. Weak domestic demand further pushes mills to offload inventory overseas, creating a pattern of 'weak domestic, strong export.'
Geopolitical Order Shifts: Structural Adjustments in Low-Count Yarn
Orders from Southeast Asia, redirected to China due to Middle East conflicts, are another key variable. These orders, mostly in low-margin, low-count yarns, align perfectly with Pakistan's strengths. The 'two-way trade' in cotton yarn and fabric between China and Pakistan has accelerated this trend—stable cotton blending and shorter transit times give Pakistani yarn an edge over Vietnamese and Indian supplies.
OE Yarn Market Under Pressure: Price-Volume Decline Signals Caution
In contrast to the active trade of Pakistani siro-spun yarn, open-end (OE) yarn imports are facing a price-volume decline. Feedback from fabric mills and traders in Guangdong, Jiangsu, and Zhejiang indicates slow inquiries and transactions for bonded and forward OE yarn. As Southeast Asian order transfers wind down and domestic winter-spring orders have yet to begin, coupled with US tariff expectations, downstream buying sentiment has turned cautious. OE yarn FOB/CNF/CIF quotes from Vietnam, Indonesia, and Malaysia have already seen modest declines.
Procurement Strategy: Wait or Enter?
The market shows clear divergence: Pakistani siro-spun yarn shipments remain steady, but OE yarn faces inventory pressure. A Zhejiang-based textile trading firm noted that Pakistani cotton prices have corrected sharply since mid-June, with mills more willing to cut prices to secure exports. For buyers, if the rupee continues to weaken, Pakistani yarn prices may have further room to fall. However, exchange rate risk must be hedged. OE yarn varieties may face further price drops, especially high-inventory Vietnamese and Indian supplies.