Pakistani Yarn Defies Downturn: A Structural Shift in the Open-End Spun Market

China's cotton yarn imports fell 14.03% month-on-month in May 2026, yet Pakistani yarn surged 80.36% year-on-year, becoming the only source with positive growth. Customs data shows Pakistan shipped 21,310 tons, accounting for 12.37% of total imports, with a marginal 0.01% monthly increase. This divergence signals a structural reshuffle in the open-end spun yarn market.

Structural Divergence Behind the Numbers

Total May imports stood at 172,200 tons, with Vietnam and India holding the top two spots at a combined 60% share. But monthly trends tell a different story: Vietnam fell 11.83%, and India plunged 29.38%. Industry data from mills and traders in Guangdong, Jiangsu, and Zhejiang reveals sluggish inquiries and slow transactions for bonded and forward open-end yarn from Vietnam, Indonesia, Malaysia, and India, with FOB/CNF/CIF quotes edging down.

In contrast, Pakistani 8S-21S siro-spun yarn continued to move steadily. This means Pakistan is rapidly eating into the market share of traditional suppliers in the low-count, low-margin segment. A Zhejiang-based trading firm noted that Pakistan's cotton prices have dropped sharply since mid-June, and mill operating rates have recovered as energy and power shortages ease. The resulting export pressure, combined with a medium-term weakening trend of the Pakistani rupee against the dollar, is driving mills to offer aggressive prices.

What Drives Pakistan's Competitiveness

Three structural factors underpin Pakistan's resilience:
- Rupee depreciation: A weaker rupee lowers the dollar-denominated price of Pakistani yarn, making it highly competitive in price-sensitive low-count markets.
- Weak domestic demand: Sluggish local textile consumption forces mills to export surplus capacity, with China as the primary destination.
- Stable cotton blending and logistics: Consistent blend ratios ensure quality uniformity, and shorter shipping times from Pakistan to Chinese ports reduce inventory risk for buyers.

Geopolitical dynamics also play a role. The US-Israel-Iran conflict has redirected some low-margin garment orders from Southeast Asia back to China, and these orders are extremely cost-sensitive—a perfect match for Pakistani yarn's low price. The bilateral cotton yarn and fabric trade between China and Pakistan is further facilitated by policy alignment.

Impact on Buyers and Traders

The open-end yarn market is currently in a price-volume downturn. The Southeast Asian order transfer is winding down, domestic winter-spring orders have yet to materialize, and the looming July US tariff decision under Section 301 is chilling sentiment. For buyers, this means greater room for negotiation but also higher inventory devaluation risk.

For trading firms, Pakistan's rise squeezes margins in traditional Vietnam-India supply chains. Relying on a single source will intensify price competition and risk order loss.

For Buyers - Track Pakistan cotton prices: They have dropped sharply since mid-June; further rupee weakening could bring even lower August shipment prices. - Stagger purchases: Split orders into 2-3 batches to mitigate price volatility. - Prioritize siro-spun 8S-21S: This category has stable supply and better quality consistency than comparable Vietnamese yarn.

For Trading Firms - Diversify supplier base: Include Pakistan in routine inquiries and use its quotes as leverage in negotiations. - Monitor Section 301 tariff timing: If tariffs are imposed in July, transshipment routes may be disrupted—negotiate cost-sharing with clients in advance. - Leverage shorter shipping times: From Pakistan to China, transit is faster than from Southeast Asia. Consider a small-batch, high-frequency inventory model to reduce capital lock-up.