Pakistan's Open-End Yarn Breaks Through: A Reshaped Import Landscape Under Triple Dividends of Exchange Rates, Orders, and Policy

In May 2026, China's total cotton yarn imports reached 172,200 tons, down 14.03% month-on-month, yet imports from Pakistan hit 21,310 tons, a slight 0.01% MoM increase and a stunning 80.36% year-on-year surge, making it the brightest spot in an otherwise declining picture. While Vietnam and India saw imports drop 11.83% and 29.38% respectively, Pakistan's share climbed to about 12.37%, quietly eroding the market share of traditional suppliers.

Exchange Rates and Orders: Two Invisible Drivers Pakistan's yarn export growth is no accident. The long-term depreciation of the Pakistani rupee against the US dollar directly lowers export costs, making its FOB/CNF/CIF quotes more aggressive. Meanwhile, conflicts involving the US, Israel, and Iran have redirected some low-margin, low-count textile orders from Southeast Asia back to China, where cost-sensitive buyers turn to Pakistan's 8S-21S siro-spun yarn. Mills in Guangdong and Jiangsu report that while the rerouted orders are winding down, Pakistan yarn shipments remain steady, indicating a solidifying cost advantage.

Weak Domestic Demand and Improved Supply: Mills Forced to Export Falling cotton prices in Pakistan since mid-June, combined with higher mill operating rates after easing energy shortages, have increased supply pressure. Weak domestic demand pushes mills to export more, while the 'two-way flow' of China-Pakistan cotton yarn and fabric trade—facilitated by bilateral trade agreements—further reduces logistics and customs costs. A Zhejiang-based trading firm notes that many buyers are waiting for the right moment to stock up on Pakistan yarn, betting on further rupee depreciation.

OE Yarn Prices and Volumes Drop: Who's Holding the Inventory? In contrast to Pakistan's resilience, inquiries and deals for open-end (OE) yarn at ports and on forward contracts remain sluggish. OE yarn FOB/CNF/CIF quotes from Vietnam, Indonesia, Malaysia, and India have already dipped. With end-use demand yet to recover and the looming threat of US tariffs on Chinese imports in July, inventory pressure for low-count yarns is shifting to the supply side. For buyers, the OE price correction may be temporary, but Pakistan's sustained strength signals a structural shift in the competitive landscape for low-count yarns.

Practical Recommendations ### For Buyers - Monitor the Pakistani rupee's exchange rate; consider increasing forward contracts when the rupee weakens to lock in cost advantages. - Take advantage of the OE yarn price correction to build positions in batches, but be wary of rising port clearance costs after the July tariff decision. - For mills with stable demand for 8S-21S siro-spun yarn, consider signing quarterly framework agreements with Pakistani suppliers to hedge against short-term price swings.

For Trading Companies - Leverage China-Pakistan trade facilitation policies to optimize logistics and customs clearance for cotton yarn imports, reducing lead times. - Prepare samples and inventory of Pakistani yarns for special counts driven by rerouted Middle East orders to capture the window of opportunity. - Closely track OE yarn price corrections from Vietnam and India, compare their cost-effectiveness with Pakistan yarn, and adjust sourcing country mix accordingly.