Divergence in Imported Cotton Yarn Market: Pakistani Yarn Surges While Open-End Spun Faces Volume and Price Decline

China's General Administration of Customs reported that in May 2026, the country imported approximately 172,200 tons of cotton yarn, a 14.03% month-on-month decline but a 71.75% year-on-year surge. This mixed figure signals a structural shift in the imported yarn market.

Regional Divergence: Pakistani Yarn Defies the Trend

Breaking down by source, Vietnam and India, the two traditional leading suppliers, shipped 82,050 tons and 22,430 tons respectively, down 11.83% and 29.38% month-on-month. In contrast, imports from Pakistan reached 21,310 tons, up 0.01% month-on-month and a striking 80.36% year-on-year.

Pakistani yarn's resilience is underpinned by multiple factors. The Pakistani rupee's sustained depreciation against the US dollar directly lowers export costs. Weak domestic demand for textiles and garments has pushed local mills to aggressively expand overseas sales. The growing Sino-Pakistani synergy in cotton yarn and fabric trade has created a two-way momentum. Additionally, Pakistani yarn benefits from stable cotton blending and shorter shipping routes to Chinese ports, offering both cost and time advantages.

Open-End Spun Under Pressure: Order Gap and Tariff Fears

In contrast, open-end spun (OE) yarn is facing a double blow of falling volumes and prices. Feedback from weaving mills and traders in Guangdong, Jiangsu, Zhejiang, and Shandong indicates that orders transferred from Southeast Asia are winding down, while domestic winter-spring orders have yet to materialize, creating a clear demand gap.

Policy uncertainty is adding further pressure. The market widely expects the US to impose new tariffs on Chinese imports in July based on 301 investigation results, dampening buyers' appetite for imported yarn. Inquiries and transactions for both bonded and forward OE yarn have slowed noticeably, and FOB/CNF/CIF quotes from Vietnam, Indonesia, Malaysia, and India have edged lower.

However, shipments of Pakistan's 8S-21S siro spun yarn have not weakened significantly, indicating continued competitiveness in the low-to-mid count segment. A trading firm in Zhejiang noted that Pakistani cotton prices have fallen sharply since mid-June, while mill operating rates have recovered as energy and power shortages ease, intensifying export pressure. With the rupee expected to depreciate further, some traders are waiting for a better buying opportunity.

Industry Impact: Greater Bargaining Power for Buyers

For domestic weaving mills and yarn traders, the current landscape offers greater room for negotiation. OE yarn supply is ample and prices are softening, allowing buyers to shop around. Meanwhile, the steady flow of Pakistani yarn provides a reliable alternative.

Downstream, competition in the low-to-mid count segment will intensify. Pakistani yarn's cost advantage may further squeeze the market share of Vietnamese and Indian products at similar price points. If US tariffs materialize, overall imported yarn costs will rise, potentially boosting the substitution effect of domestic yarn.

For Buyers - Monitor Pakistani cotton prices and rupee exchange rate to time purchases. - Slow down OE yarn procurement and leverage the current buyer's market for better terms. - Assess tariff risks and negotiate FOB/CNF terms with suppliers to lock in forward costs.

For Foreign Trade Firms - Pakistani yarn competitiveness is unlikely to reverse soon; consider direct sourcing from Pakistani mills to reduce intermediaries. - Prepare for capacity underutilization after the Southeast Asian order wave ends; pivot to domestic or non-US markets. - Leverage Sino-Pakistani trade agreement benefits to optimize logistics and settlement for two-way yarn and fabric trade.