China's cotton yarn imports in May 2026 dropped 14% month-on-month, but Pakistani yarn stood out with a 0.01% MoM increase and over 80% year-on-year growth. This contrast signals a shift in the competitive landscape for open-end (OE) spinning. Customs data shows total imports of 172,200 tons, with Vietnam and India contributing 82,050 and 22,430 tons respectively—down 11.8% and 29.4% MoM. Pakistan, with 21,310 tons, not only held steady but surged 80.4% YoY, indicating it is capturing market share from other origins.
OE yarn is the hardest hit in this volume and price decline. Mills and traders in Guangdong, Jiangsu, Zhejiang, and Shandong report sluggish inquiries and deals for bonded and forward OE yarn from Vietnam, Indonesia, Malaysia, and India, with FOB/CNF/CIF quotes edging down. In contrast, Pakistan's Ne 8-21 siro-spun yarn shipments remain resilient.
Three factors drive Pakistan's strength. First, the Pakistani rupee's depreciation against the dollar lowers its dollar-denominated costs, making it more price-competitive than Indian or Vietnamese yarn. Second, geopolitical tensions have redirected some low-margin apparel orders from Southeast Asia to China, favoring cost-effective Pakistani yarn. Third, Pakistan's stable cotton blending and mature trade channels with China ensure reliable supply, especially as mill operating rates recover amid easing energy shortages.
For the domestic OE market, rising Pakistani imports will cap price increases. With winter-spring domestic orders yet to arrive and the shadow of potential US Section 301 tariffs in July, downstream mills remain cautious. This could trigger price competition among OE yarn suppliers, benefiting buyers but squeezing margins for local spinners.
Practical Recommendations
**For Buyers:**
- Monitor PKR/USD trends; increase forward contracts for Pakistani yarn during depreciation cycles.
- Compare prices of Ne 8-21 siro-spun yarn from Pakistan vs. Vietnam/India; prioritize Pakistan if the gap exceeds 5%.
- Hedge against July tariff risks by avoiding excessive inventory buildup.
**For Exporters:**
- Leverage Pakistani yarn costs to develop low-count fabric orders for Middle East and African markets, bypassing Southeast Asian competition.
- Establish direct sourcing channels with Pakistani mills to reduce intermediary margins.
- Track China-Pakistan bilateral trade policies for potential tariff exemptions or customs facilitation.