In May 2026, China's total cotton yarn imports reached 172,200 tons, down 14.03% month-on-month but up 71.75% year-on-year. Behind this contrast lies a sharp divergence in origin countries: imports from Vietnam and India fell 11.83% and 29.38% month-on-month, respectively, while Pakistani yarn, accounting for 12.37% of total imports, edged up 0.01% month-on-month and soared 80.36% year-on-year.
Open-End Varieties Under Pressure, Pakistani Yarn Breaks Out
Open-end spinning yarn is experiencing simultaneous volume and price declines. Mills and traders in Guangdong, Jiangsu, Zhejiang, and Shandong report sluggish inquiries and transactions for bonded and forward open-end yarn, with FOB/CNF/CIF offers from Vietnam, Indonesia, Malaysia, and India continuing to soften. Meanwhile, Pakistan's 8S-21S siro-spun yarn shipments remain resilient, standing out as a rare bright spot in the import market.
This strength is no accident. The Pakistani rupee's medium- to long-term depreciation against the U.S. dollar directly lowers export costs, incentivizing mills to push overseas sales. Weak domestic demand in Pakistan further forces mills to offload inventory abroad, while the 'two-way flow' of cotton yarn and fabric trade between China and Pakistan reduces transaction barriers. Additionally, Pakistan's stable cotton blending and shorter shipping times to Chinese ports offer a natural advantage for small and medium-sized weaving mills.
Geopolitical and Policy Factors Converge, Order Backflow Supports Short-Term Demand
Industry insiders attribute part of Pakistani yarn's import growth to the backflow of low-count, low-margin textile and garment orders from Southeast Asia, driven by Middle East conflicts. These price-sensitive orders align perfectly with Pakistan's cost advantage. However, this backflow is entering its final phase, and domestic autumn-winter orders have yet to be placed, casting doubt on future momentum.
Adding to the uncertainty, expectations of U.S. tariff hikes under Section 301 are dampening market sentiment. With the July tariff adjustment window approaching, forward contract negotiations for open-end yarn at ports have slowed, and traders are adopting a wait-and-see approach. A Zhejiang-based light textile import-export company notes that since mid-June, Pakistani cotton prices have dropped significantly, while mill operating rates have recovered amid eased energy and power supply constraints. Export pressure is mounting, and the firm is waiting for a better entry point to replenish stocks.
Impact on the Supply Chain: Can Domestic Yarn Fill the Gap?
The shift in import structure directly affects pricing and production scheduling across China's cotton spinning chain. The decline in open-end yarn suggests a temporary oversupply in the low-to-mid end market, intensifying price competition for domestic open-end yarn. Meanwhile, the sustained strength of Pakistani yarn may erode the market share of domestic siro-spun yarn in cost-sensitive downstream segments such as denim and home textiles.
For domestic spinners, this trend presents both a challenge and a signal: they must guard against the low-price impact of Pakistani yarn, enabled by currency and policy advantages, while accelerating the shift toward high-count, differentiated, and functional yarns to avoid head-on competition in the 8S-21S siro-spun segment. Close monitoring of Pakistani cotton prices and the rupee exchange rate is essential; if cotton prices continue to fall, Pakistani yarn export offers may drop further, narrowing the substitution window for domestic products.