China's cotton yarn import data for May 2026 reveals an accelerating market divergence. Despite a 14% month-on-month decline in total volume, imports from Pakistan held flat and surged over 80% year-on-year, contrasting sharply with declines of 11.8% for Vietnamese yarn and 29.4% for Indian yarn. This divergence is not coincidental but results from four interacting variables: exchange rates, energy supply, domestic demand, and geopolitical shifts.
Reshaping of Origin Landscape
The strongest driver behind Pakistani yarn's performance is the sustained depreciation of the Pakistani rupee against the US dollar, granting it a clear price advantage in international markets. Concurrently, weak domestic textile demand in Pakistan has pushed mills to redirect capacity toward exports. Improved energy and power supply, along with rising operating rates, have significantly boosted export supply capacity.
In terms of product categories, open-end spinning yarn is under dual pressure of declining volume and price. As Southeast Asian transfer orders wind down, domestic autumn-winter orders have yet to materialize, and market expectations of US tariff hikes in July weigh on inquiries and transactions for bonded and forward open-end yarn. FOB/CNF/CIF offers from Vietnam, Indonesia, Malaysia, and India continue to edge lower. In contrast, Pakistan's 8S-21S siro-spun yarn shipments have not slowed noticeably, maintaining competitiveness in specific count ranges.
Cost and Order Transmission
Pakistani yarn's competitive edge is also reflected in the linkage between cotton prices and export pricing. Since mid-June, domestic cotton prices in Pakistan have fallen sharply, providing cost relief for mills. Chinese fabric mills and yarn traders are waiting on the sidelines for better buying opportunities. A Zhejiang-based textile import-export company noted that the rupee's depreciation trend has made delayed procurement a common strategy to secure lower prices.
On the demand side, the rerouting of low-to-medium count, low-margin textile and apparel orders from Southeast Asia back to China—driven by US-Israel-Iran tensions—has been a key external variable boosting Pakistani yarn exports. These orders are highly cost-sensitive, and Pakistani yarn's price stability and consistent cotton blending fit the bill. Moreover, the deepening 'two-way trade' in cotton yarn and fabric between China and Pakistan, combined with shorter transport distances and controllable logistics costs, gives Pakistani yarn a structural advantage over other origins.
Three Key Signals in the Import Yarn Market
First, origin concentration is breaking down. Vietnamese yarn has long held nearly half of China's import cotton yarn market, but its share has fallen from recent highs. Pakistani yarn, at 12.37% of total imports, has become the third-largest source, with growth far exceeding the average. Second, open-end yarn's pricing power is weakening. Amid high inventories, an order gap, and tariff uncertainty, a buyer's market for open-end yarn is becoming more pronounced. Third, siro-spun yarn's stability deserves attention. Pakistan's sustained shipments in this category indicate a structural demand gap in the low-to-medium count segment.