China's cotton yarn import market is undergoing a silent power shift. According to customs data for May 2026, total imports reached approximately 172,200 tons, down 14.03% month-on-month but still up 71.75% year-on-year. The growth was not evenly distributed. Vietnam and India, the two traditional suppliers, saw month-on-month declines of 11.83% and 29.38% respectively. Pakistan, however, bucked the trend with 21,310 tons, virtually flat month-on-month and an 80.36% year-on-year surge, making it the only source to gain ground. This contrast reveals a structural reshuffle in the low-count yarn market. While open-end spun yarn faces dual pressure on volume and price, why has Pakistani yarn become more competitive? The answer lies at the intersection of cost curves, exchange rate fluctuations, and geopolitical order shifts.
Three Pillars of Pakistani Yarn's Rise
The surge in Pakistani cotton yarn imports is no accident. First is the exchange rate advantage. The Pakistani rupee's medium- to long-term depreciation against the U.S. dollar gives Pakistani yarn natural price elasticity. As the Vietnamese dong remains relatively stable and the Indian rupee fluctuates modestly, Pakistani FOB quotes keep declining, directly eroding competitors' market share. Second, weak domestic demand is forcing exports. Pakistan's textile and apparel consumption is sluggish, pushing mills to offload surplus capacity overseas. With energy supply constraints easing and mill operating rates rising, supply-side expansion further depresses export prices. A trading company in Zhejiang confirmed that merchants are waiting for the right moment to restock Pakistani yarn. Third, geopolitical order spillovers. Conflicts involving the U.S., Israel, and Iran have diverted some Southeast Asian low-count, medium-margin textile orders back to China. These cost-sensitive orders find Pakistani yarn a perfect fit, filling the gap left by Vietnamese and Indian yarns that remain relatively expensive despite price corrections. However, industry insiders believe this factor is temporary and its marginal impact will fade as orders wind down.
Open-End Market Under Pressure, Pakistani Yarn Shines
From a product perspective, the imported yarn market is diverging. Weavers and traders in Guangdong, Jiangsu, Zhejiang, and Shandong report that inquiries and transactions for port-bonded and forward open-end spun yarn have slowed significantly. FOB/CNF/CIF quotes from Vietnam, Indonesia, Malaysia, and India continue to soften but fail to stimulate demand. In contrast, shipments of Pakistani 8S-21S siro-spun yarn have not weakened notably. This stability indicates that domestic weaving mills are accelerating their shift toward Pakistani yarn for low-count products. For factories producing denim, towels, and low-count knitted fabrics, Pakistani yarn's cost advantage is increasingly hard to ignore.
Currency and Policy Risks: The Hidden Risks
Despite its strong momentum, Pakistani yarn faces two key variables. First, the sharp decline in Pakistani cotton prices. Since mid-June, domestic cotton prices in Pakistan have fallen continuously. While this eases mills' cost pressure, it also opens more room for export quotes to drop. If cotton prices keep falling, Pakistani yarn may enter a vicious cycle of 'lower prices, more sales,' exacerbating market wait-and-see sentiment. Second, U.S. tariff risks. Market expectations of new tariffs on Chinese imports under Section 301 in July are dampening procurement appetite. If tariffs materialize, end-order demand could contract further, transmitting pressure upstream to yarn imports. Whether Pakistani yarn can sustain its growth trajectory will depend on whether its price advantage can offset the added trade costs.
Practical Recommendations
For Buyers - Increase spot purchases of Pakistani yarn, especially 8S-16S siro-spun varieties, to lock in low prices during the rupee's depreciation window. - Diversify sourcing to avoid over-reliance on Pakistan. Vietnamese open-end yarn, though declining in price, still offers better consistency for orders requiring uniform yarn quality. - Monitor Pakistani cotton prices. If they stabilize and rebound, Pakistani yarn quotes may follow suit, making it prudent to lock in forward cargoes early.
For Foreign Trade Companies - Leverage the trend of Southeast Asian order repatriation by recommending Pakistani yarn as a cost-effective substitute for price-sensitive clients. - Closely track the final outcome of U.S. Section 301 tariffs. If imposed, reassess the landed cost of Pakistani yarn imports. - Explore long-term direct sourcing partnerships with Pakistani mills to capitalize on the 'two-way' policy benefits in China-Pakistan cotton yarn and fabric trade, reducing intermediary premiums.
The rise of Pakistani yarn is not an isolated event. It mirrors a broader rebalancing of cost structures across the global textile supply chain. For Chinese weavers, this means procurement strategies must shift from 'quality first' to 'value for money'—and this transition is only just beginning.