Pakistani Yarn Breaks Through: Reshaping Import Landscape Amidst OE Yarn Price-Volume Pressure

In May 2026, China's cotton yarn import market showed significant structural divergence. According to customs data, total imports were about 172,200 tons, down 14% month-on-month but up 71.75% year-on-year. Within this contraction, Pakistani yarn emerged as the only source of monthly growth, with imports of approximately 21,310 tons, up 0.01% month-on-month and surging 80.36% year-on-year. This contrast indicates a profound shift in the competitive landscape of imported yarn.

Drivers Behind Pakistani Yarn's Strength

The rise of Pakistani yarn is not accidental. From the exchange rate perspective, the long-term depreciation trend of the Pakistani rupee against the US dollar has directly enhanced the price competitiveness of its cotton yarn exports. Meanwhile, Pakistan's textile capacity utilization has recovered with improved energy supply, while weak domestic demand has forced mills to shift more output to exports. Additionally, the 'two-way trade' between China and Pakistan in cotton yarn and fabrics has reduced transaction costs, with stable cotton blending quality and shorter transportation cycles providing significant advantages.

In contrast, imports from Vietnam and India saw notable declines. In May, Vietnam's cotton yarn imports were about 82,050 tons, down 11.83% month-on-month; India's were about 22,430 tons, plummeting 29.38%. This drop is closely linked to the winding down of Southeast Asian transfer orders, and also reflects a broader weakness in OE yarn demand.

OE Yarn Under Price-Volume Pressure

From a product category perspective, OE yarn is facing a price-volume decline. Feedback from fabric mills and yarn traders in Guangdong, Jiangsu, Zhejiang, and Shandong indicates that inquiries and transactions for bonded and forward OE yarn have slowed significantly. FOB/CNF/CIF offers from Vietnam, Indonesia, Malaysia, and India continue to edge down. This is exacerbated by the absence of domestic winter-spring orders and the anticipation of new US tariffs in July, leading to a cautious market sentiment.

Notably, Pakistani 8S-21S siro-spun yarn shipments remain resilient, showing no significant weakening. This suggests that in the low-count segment, Pakistani yarn is replacing some Vietnamese and Indian products, particularly in low-margin, low-count orders, forming a stable supply channel.

Implications for Domestic Mills

The current adjustment in imported yarn patterns is essentially a result of the interplay among cost, exchange rates, and geopolitics. For domestic mills, this means procurement strategies need to shift from sole reliance on Southeast Asia to a diversified portfolio. Pakistani yarn's advantages in price and delivery are likely to persist in the near term, but mills should watch for cost transmission risks from cotton price corrections.

For Buyers - Monitor Pakistani rupee exchange rate windows and lock in forward contracts during depreciation cycles. - Prioritize Pakistani 8S-21S siro-spun yarn for low-count procurement and test its blending with domestic yarns. - Reduce spot purchases of Vietnamese and Indian OE yarn, shifting to futures or forward cargo for lower quotes.

For Foreign Trade Firms - Assess the impact of US tariffs in July on transshipment orders and adjust procurement ratios between Southeast Asia and Pakistan in advance. - Leverage Sino-Pak trade facilitation policies to explore direct cooperation with Pakistani mills, cutting intermediary costs. - Monitor Pakistani cotton price trends; if prices fall further, increase Pakistani yarn procurement to hedge against Southeast Asian quote declines.