In May 2026, China's total cotton yarn imports plunged 14% month-on-month, but Pakistani yarn defied the trend with an 80% year-on-year surge to 21,300 tons. This contrast signals a structural shift in the low-to-mid count yarn market, where Pakistani yarn is becoming a force to be reckoned with amid overall air-jet spun volume-price pressure.
Structural Divergence Behind the Data
According to customs data, China imported approximately 172,200 tons of cotton yarn in May 2026, down 14.03% month-on-month but up 71.75% year-on-year. Vietnam and India contributed 82,050 tons and 22,430 tons respectively, with month-on-month declines of 11.83% and 29.38%. In contrast, Pakistan's imports were nearly flat month-on-month but soared 80.36% year-on-year. This 'total down, Pakistan up' pattern reflects a migration in demand for low-to-mid count yarns.
Industry data further shows that inquiries and transactions for air-jet spun yarn have slowed, with FOB/CNF/CIF quotes from Vietnam, Indonesia, and Malaysia continuing to edge down. Meanwhile, shipments of Pakistani 8S-21S siro-spun yarn have not weakened significantly. This suggests that Pakistani yarn's competitiveness is not merely price-driven but underpinned by multiple external factors.
Three Drivers Behind Pakistani Yarn's Rise
The first driver is the sustained depreciation of the Pakistani rupee against the US dollar, which lowers the dollar-denominated cost of Pakistani yarn and enhances its price competitiveness. The second driver stems from weak domestic demand in Pakistan, pushing mills to redirect capacity to export markets, while improved energy supply has boosted operating rates, intensifying export pressure. The third driver is geopolitical: the US-Israel-Iran conflict has diverted some low-margin, low-count apparel orders from Southeast Asia back to China, where they align closely with Pakistani yarn's positioning.
Additionally, the 'two-way flow' in China-Pakistan cotton yarn trade deserves attention. Pakistani yarn offers stable cotton blending, shorter transit times, and lower logistics costs, which are particularly advantageous in today's quick-response sourcing environment.
Transmission Effects on Buyers and Mills
For Chinese weaving mills and yarn traders, the sustained increase in Pakistani yarn provides a stable and price-flexible alternative alongside traditional Vietnamese and Indian supplies. During the current price correction window for air-jet spun yarn, some traders are already holding cash in anticipation of bargain opportunities from Pakistan.
For Vietnamese and Indian suppliers, however, Pakistani yarn's rise means intensified competition in the low-to-mid count segment. If Pakistani exports continue to grow, it may force Vietnam and India to adjust pricing strategies or pivot toward higher-count differentiated products.
Risks remain. Southeast Asian order transfers are winding down, domestic winter-spring orders have yet to materialize, and potential US tariff hikes under Section 301 in July could dampen import demand. Whether Pakistani yarn's strength is sustainable hinges on the pace of end-demand recovery.