According to China Customs data, total cotton yarn imports in May 2026 reached 172,200 tons, down 14% month-on-month but up 72% year-on-year. While the headline figure remains robust, open-end (OE) yarn imports are experiencing a volume-price double decline, with one notable exception: Pakistani cotton yarn imports surged 80% year-on-year, making it the biggest variable in the month.
Structural divergence beneath the surface
Imports from Vietnam fell 11.8% month-on-month to 82,050 tons, while those from India plummeted 29.4% to 22,430 tons. Together they still command over 60% of the market, but growth is clearly decelerating. In contrast, Pakistani imports reached 21,310 tons, virtually flat month-on-month, yet up 80.4% year-on-year. Pakistan's market share jumped from around 8% a year ago to 12.4%, now closely trailing India.
On the pricing side, mills and traders in Guangdong, Jiangsu, Zhejiang, and Shandong report that inquiries and transactions for both bonded and forward OE yarn have slowed, with FOB/CNF/CIF quotes from Vietnam, Indonesia, Malaysia, and India edging lower. Meanwhile, Pakistani 8S-21S siro-spun yarn continues to move at a steadier pace, showing greater price resilience.
Three drivers behind Pakistan's surge
The spike in Pakistani yarn imports is no accident. First, the Pakistani rupee's medium-to-long-term depreciation against the US dollar directly lowers procurement costs, giving mills a natural price advantage. Chinese traders are holding cash, waiting for an even better buying opportunity. Second, weak domestic demand in Pakistan is forcing mills to export more. With energy and power supply constraints easing, mill operating rates are rising, but local consumption remains sluggish, pushing surplus capacity overseas. Third, Sino-Pakistani cotton yarn trade has become increasingly frictionless. The two countries now operate a 'two-way street' in cotton yarn and fabric trade, with short shipping distances and stable cotton blending ratios offering both cost and reliability advantages.
Additionally, geopolitical conflicts in the Middle East have redirected some low-margin, low-count garment orders from Southeast Asia back to China. These orders fit perfectly with the specifications and cost structure of Pakistani yarn, further boosting import demand.
Risks and the window of opportunity
Despite Pakistan's strong momentum, two risks warrant attention. First, the transfer of orders from Southeast Asia is winding down, and domestic winter-spring orders have yet to materialize, leaving the market without a fresh demand driver. Second, expectations of US tariff hikes on Chinese imports under Section 301 are dampening traders' willingness to build inventory, especially for low-value-added OE yarn.
A Zhejiang-based textile trading company notes that Pakistani cotton prices have corrected sharply since mid-June. With mills' energy costs easing, export competition is likely to intensify further. Buyers holding cash may find a better replenishment window for Pakistani yarn in the coming one to two months.