Shifting Dynamics in Imported Cotton Yarn: Pakistani Yarn Surges Amidst OE Downturn

China's latest customs data for May 2026 reveals a significant divergence in the imported cotton yarn market: total volume reached approximately 172,200 tons, down 14.03% month-on-month, but still up 71.75% year-on-year. A more noteworthy structural shift is that imports from Pakistan rose 0.01% month-on-month and surged 80.36% year-on-year, outperforming all other major origins.

Why Pakistani Yarn is Gaining Ground

The strong performance of Pakistani yarn is no coincidence. On a macro level, the long-term depreciation of the Pakistani rupee against the US dollar has directly lowered its export prices, enhancing its price competitiveness. Meanwhile, the easing of energy and power supply crises in Pakistan has led to higher mill operating rates, increasing production capacity and export pressure. Additionally, the 'two-way trade' policy between China and Pakistan for cotton yarn and fabrics, along with stable cotton blending and shorter transport distances, have collectively strengthened its competitiveness.

OE Yarn Faces Volume and Price Decline

In contrast to Pakistani yarn's growth, imports from traditional suppliers like Vietnam and India fell 11.83% and 29.38% month-on-month, respectively. Open-end (OE) yarn has been hit hardest. Feedback from fabric mills and traders in Guangdong, Jiangsu, Zhejiang, and Shandong indicates slow inquiries and transactions for bonded and forward OE yarn. Three reasons: first, the wave of orders transferred from Southeast Asia to China is winding down; second, domestic winter-spring orders have not yet been placed; third, market anticipation of US tariffs under Section 301 in July has made buyers cautious.

Price Transmission and Procurement Strategies

Due to weak demand, FOB/CNF/CIF offers for OE yarn from Vietnam, Indonesia, Malaysia, and India have seen modest corrections. In contrast, shipments of Pakistani 8S-21S siro spun yarn have not slowed significantly, showing market resilience. A Zhejiang-based textile trading company notes that with recent sharp price corrections in Pakistani cotton and the rupee's depreciation, a window for restocking at favorable prices is opening. This suggests that Pakistani yarn's cost advantage may widen further in the coming months.

Implications for the Supply Chain

This structural shift in imported cotton yarn carries key implications for Chinese textile enterprises:
- In the low-count yarn segment, Pakistani yarn is increasingly substituting domestic and other origins, pressuring local spinners.
- The OE yarn downturn may force mills to adjust product mixes toward higher counts or differentiated products.
- Tariff uncertainty calls for shorter procurement cycles and a 'small batch, multiple shipment' approach.

For Buyers - Monitor the restocking window for Pakistani yarn, leveraging rupee depreciation and falling cotton prices to lock in low-cost supply. - Hold off on OE yarn purchases until Southeast Asian offers correct further. - Prioritize Pakistani siro spun yarn for its stable supply and price advantage.

For Foreign Trade Firms - Strengthen direct sourcing from Pakistani mills to reduce intermediaries and leverage Sino-Pak trade facilitation policies. - Track US tariff implementation timelines and adjust export product mixes and destination markets accordingly. - As Southeast Asian orders fade, actively explore emerging markets like the Middle East and Africa to diversify risk.