The imported yarn market is undergoing a silent power shift. In May 2026, China's total cotton yarn imports stood at approximately 172,200 tons, down 14.03% month-on-month but up 71.75% year-on-year. While the overall trend suggests recovery, a closer look reveals a sharp contrast: imports from Vietnam and India both saw double-digit monthly declines, while Pakistan posted a slight 0.01% month-on-month increase and a staggering 80.36% year-on-year growth—making it the only major supplier to record positive monthly growth.
This divergence is no coincidence. Pakistan's cotton yarn is gaining competitiveness through three synergistic drivers: cost advantages, currency depreciation, and trade policy alignment. As Vietnamese and Indian open-end spun yarn prices continue to correct and inquiries at ports cool, Pakistan's 8S-21S siro-spun yarn maintains relatively steady shipment volumes.
Three Pillars of Pakistan's Rise
The prolonged depreciation of the Pakistani rupee against the US dollar is the most direct catalyst. A weaker rupee makes dollar-denominated yarn more price-elastic, boosting its appeal for cost-sensitive Chinese fabric mills. Meanwhile, easing energy shortages in Pakistan have lifted mill operating rates, increasing export pressure and forcing mills to compete more aggressively for overseas orders.
Another often overlooked factor is order reshoring driven by geopolitical tensions. The US-Israel-Iran conflict has redirected some low-to-mid-count, low-margin textile orders from Southeast Asia back to China. These orders are highly cost-sensitive, and Pakistan's yarn precisely covers the mainstream 8S-21S range. The combination of order reshoring, stable cotton blending, and logistical proximity has created a wave of structural demand.
The growing synergy in Sino-Pak cotton yarn and fabric trade is also accelerating. The trade chain is evolving from one-way exports to closer collaboration, providing policy and logistical support for sustained Pakistani yarn inflows.
Open-End Spun Market Enters 'Squeeze' Phase
In contrast to Pakistan's strong performance, the open-end spun yarn market as a whole is undergoing a correction in both volume and price. FOB/CNF/CIF offers from Vietnam, Indonesia, Malaysia, and India have continued to edge down, while inquiries and transactions for bonded and forward cargoes have slowed significantly.
Three factors are at play: first, the temporary demand from Southeast Asian order reshoring is fading; second, domestic winter-spring orders have yet to materialize, dampening mill restocking appetite; third, expectations of US 301 tariffs in July are fostering a wait-and-see attitude among importers.
This means the open-end spun market is 'squeezing out water'—suppliers reliant on short-term orders will face greater inventory pressure as demand recedes, while Pakistan, with its cost advantages and stable customer base, is gaining a firmer foothold.
Mill Reactions and Price Expectations
Feedback from fabric mills and yarn traders in Guangdong, Jiangsu, Zhejiang, and Shandong is consistent: Pakistan's siro-spun yarn is moving steadily, but overall imported yarn inquiries have cooled. A Zhejiang-based trading company has explicitly stated it is waiting for the right opportunity to restock Pakistani cotton yarn, as domestic cotton prices in Pakistan have fallen sharply, reducing mill costs and leaving room for further declines in export offers.
This expectation is creating a 'wait-and-pressure' cycle: buyers delay purchases, sellers' inventories rise, eventually forcing offers lower. For Vietnamese and Indian mills, this adjustment may prove longer than anticipated; for Pakistani mills, the dual pressures of rupee depreciation and weak domestic demand have become weapons for market share gains.