Pakistani Cotton Yarn Breaks Through: Structural Divergence in Open-End Spinning Trade

China's cotton yarn import landscape is undergoing a quiet reshuffle. According to customs data for May 2026, total cotton yarn imports stood at 172,200 tons, down 14.03% month-on-month, but Pakistani cotton yarn imports reached 21,310 tons, soaring 80.36% year-on-year, making it the only major source country to post positive month-on-month growth. This contrast indicates that, amid the dual decline in open-end spinning yarn volume and price, Pakistan is leveraging multiple structural advantages to capture market share from Vietnam and India in the low-count yarn segment.

Shrinking Total Imports, Yet Pakistan Grows

In May, imports from Vietnam and India, the top two suppliers, dropped 11.83% and 29.38% month-on-month to 82,050 tons and 22,430 tons, respectively. Pakistan's imports edged up 0.01%, standing out against the backdrop of overall contraction. Behind this is a cooling in open-end spinning yarn trade, particularly 8S to 21S siro-spun yarn. Feedback from weaving mills and traders in Guangdong, Jiangsu, Zhejiang, and Shandong indicates sluggish inquiries and transactions for bonded and forward open-end yarn, with prices from Vietnam, Indonesia, Malaysia, and India continuing to edge down.

Three Drivers Behind Pakistan's Competitiveness

Pakistan's resilience is no accident. First, geopolitical factors have driven order reshoring: Middle East conflicts redirected some low-to-mid-count, low-margin textile orders from Southeast Asia to China, and Pakistan—as a neighboring cotton textile giant—captured this incremental volume. Second, the Pakistani rupee's persistent depreciation lowers dollar-denominated export costs, offering Chinese buyers a price edge. Third, weak domestic demand in Pakistan forces mills to boost exports, and with energy and power supply crises easing, mill operating rates have risen, intensifying export pressure. A Zhejiang-based trading company noted that Pakistani cotton prices have corrected sharply since mid-June, with mills ramping up output, while the rupee's medium-term depreciation outlook prompts buyers to wait for restocking opportunities.

Implications for the Supply Chain

What does this structural shift mean for Chinese weaving mills? In the short term, a flood of Pakistani yarn will lower procurement costs for low-count yarns, benefiting mills producing denim, workwear, and similar fabrics. However, long-term risks persist: the shadow of potential US tariffs under Section 301 investigations in July could disrupt end-use orders for re-exports, dampening demand for Pakistani yarn. Additionally, the Southeast Asian order reshoring wave is fading, and domestic winter-spring orders have yet to materialize, creating a potential gap period.

Practical Recommendations

For Buyers - Monitor Pakistani rupee exchange rate trends; lock in prices during depreciation cycles to reduce landed costs. - Prioritize 8S-21S siro-spun yarn for low-count products, while evaluating price corrections in Vietnamese and Indian open-end yarn to diversify supply risk. - Stay alert to the impact of US tariff policy in July on end-user orders; avoid overstocking and maintain flexible inventory levels.

For Foreign Trade Firms - Strengthen direct sourcing from Pakistani mills, leveraging the 'two-way trade' policy for cotton yarn and fabric to reduce intermediary costs. - For Middle East re-export orders, verify rules of origin in advance to prevent tariff-driven margin erosion. - Monitor signals of Pakistan's domestic demand recovery; if local consumption picks up, export prices may rebound, requiring early adjustment of procurement schedules.