China's cotton yarn import data for May 2026 reveals a notable divergence: total imports dropped 14% month-on-month, with arrivals from Vietnam and India declining, while Pakistani yarn imports surged over 80% year-on-year. According to publicly available customs data, Pakistan's yarn imports reached approximately 21,300 tons in May, accounting for 12.37% of total imports, remaining essentially flat month-on-month but significantly outperforming other major origins. This divergence signals a structural shift in the supply landscape for low-to-medium count yarns.
Cost and Exchange Rate: Pakistan's Price Moat
The medium-to-long-term depreciation of the Pakistani rupee against the U.S. dollar is the primary driver behind the growing export competitiveness of Pakistani yarn. For spinning mills, a weaker rupee directly reduces the dollar-denominated export cost of cotton yarn, allowing Pakistani yarn to maintain a sustained price advantage over Vietnamese and Indian yarns on a CIF basis. Meanwhile, Pakistani domestic cotton prices have seen a sharp consecutive decline since mid-June, further compressing spinners' raw material costs. Together, these factors give Pakistani yarn a clear edge in open-end and siro-spun low-to-medium count varieties.
More critically, after the easing of energy and power supply crises, Pakistani spinning mills are steadily increasing their operating rates. This means supply-side bottlenecks are opening up, and capacity release will support further export growth. For Chinese traders holding orders, waiting for opportunities to replenish Pakistani yarn has become a rational tactical choice.
Order Return and Trade Channels: Dual Demand Support
Industry assessments suggest that behind the growth of Pakistani yarn imports lie two demand-side logics. First, conflicts involving the U.S., Israel, and Iran have led to some low-to-medium count, low-margin textile and apparel orders from Southeast Asia returning to the Chinese market. These orders are often cost-sensitive and have tight delivery schedules. Pakistani yarn, with its shorter shipping distance and stable cotton blending, has become a preferred substitute for Southeast Asian yarns. Second, China-Pakistan cotton yarn and fabric trade is forming a 'two-way street' pattern—rising Chinese demand for Pakistani yarn is matched by expanding Pakistani purchases of Chinese fabrics. This complementary trade structure gives the growth of Pakistani yarn imports stronger sustainability.
Regional feedback from major weaving clusters in Guangdong, Jiangsu, Zhejiang, and Shandong indicates that the wave of transferred orders from Southeast Asia is winding down. Domestic winter-spring bulk orders have not yet been placed, and uncertainties surrounding the U.S. Section 301 tariff review in July have slowed inquiries and transactions for bonded and forward open-end spun yarn. Yet amid this slowdown, shipments of Pakistani 8S-21S siro-spun yarn have not weakened significantly, suggesting resilient downstream demand for Pakistani yarn.
Impact on Domestic Sourcing and Price Trends
The sustained rise of Pakistani yarn is reshaping the pricing anchor for low-to-medium count yarns in China. Historically, open-end spun yarn prices were benchmarked against Vietnamese and Indian quotes. But now, with Pakistani FOB and CNF quotes being more competitive and supply volumes expanding, mills in Vietnam, Indonesia, and Malaysia face downward pricing pressure. Customs data shows that May imports from Vietnam and India fell 11.83% and 29.38% month-on-month respectively, a significant drop partly attributable to intensified price competition.
For domestic weaving mills, this presents both opportunities and challenges. In the short term, the cost advantage of Pakistani yarn helps lower raw material costs, especially during the current window before domestic orders ramp up. However, over-reliance on a single source carries medium-term risks—fluctuations in Pakistani domestic cotton prices and exchange rates, as well as energy supply stability, could become variables affecting delivery schedules.