Imported Cotton Yarn Market Diverges: Open-End Yarn Slows, Pakistan's SIRO Yarn Bucks Trend

China's cotton yarn imports in May 2026 fell 14.03% month-on-month to 172,200 tons, though year-on-year growth remained high at 71.75%. The structural divergence is more noteworthy: open-end (OE) yarn volumes and prices are both declining, while Pakistan's SIRO yarn is bucking the trend. This reflects a confluence of short-term order fluctuations, exchange rate movements, and Sino-Pakistan trade policies.

Open-End Yarn Under Pressure: Order Ebb and Tariff Concerns

Feedback from major textile hubs in Guangdong, Jiangsu, Zhejiang, and Shandong indicates sluggish inquiries and transactions for bonded and forward OE yarn. FOB/CNF/CIF offers from Vietnam, Indonesia, Malaysia, and India have been declining modestly.

The core reasons: Southeast Asian garment orders transferred to China are winding down, while domestic winter-spring orders have yet to commence, creating a demand vacuum. Meanwhile, market expectations of US tariff increases on Chinese goods under Section 301 in July are prompting cautious import behavior and inventory reduction.

Data shows May imports from Vietnam fell 11.83% month-on-month to 82,050 tons, and from India plunged 29.38% to 22,430 tons. These two origins are major OE yarn suppliers, confirming the category's weakness.

Pakistan's SIRO Yarn Defies the Trend: Exchange Rate, Domestic Demand, and Trade Policy

In stark contrast to OE yarn's slump, Pakistan's cotton yarn imports performed strongly. May imports from Pakistan reached 21,310 tons, up 0.01% month-on-month but surging 80.36% year-on-year. Among all major origins, Pakistan was the only one with positive sequential growth and the largest annual gain.

This strength is no accident. The Pakistani rupee's medium-to-long-term depreciation against the US dollar directly boosts the price competitiveness of its yarn. Weak domestic textile demand in Pakistan has forced mills to increase export efforts. Improved energy and power supply have allowed mill operating rates to rise, further expanding export supply.

Additionally, Sino-Pakistan cotton yarn and fabric trade is forming a 'two-way street.' Pakistani cotton is relatively consistent in quality, and shipping distances are short with faster transit times, offering supply chain stability advantages over some Southeast Asian countries.

Practical Implications for Buyers and Traders

The current market divergence demands differentiated strategies for different product categories. OE yarn weakness may persist into Q3, while Pakistan's strength depends on rupee trends, domestic mill operating rates, and the trajectory of US-China tariff negotiations.

For Buyers - For OE yarn needs, consider postponing purchases until after mid-July to await further price corrections and tariff policy clarity. - For Pakistani SIRO yarn, lock in forward contracts during the rupee's weakness, but assess Pakistan's political stability and energy supply reliability. - Monitor the actual US Section 301 tariff rate in July; an unexpectedly high rate could shift import demand toward domestic or alternative Southeast Asian yarn.

For Foreign Trade Companies - For exports to Pakistan, consider settling in RMB to avoid further exchange losses from rupee depreciation. - For OE yarn orders, negotiate more flexible pricing terms with Vietnamese or Indian suppliers, or pivot to more price-competitive Pakistani SIRO yarn. - Closely track China's trade facilitation policies for Pakistani cotton yarn imports, such as customs clearance efficiency and tariff reductions, as these directly impact import costs and lead times.