Latest data from China Customs shows that in May 2026, China's cotton yarn imports totaled 172,200 tons, down 14.03% month-on-month but up 71.75% year-on-year. More notably, the country composition behind this total is undergoing a sharp divergence: imports from Vietnam and India fell 11.83% and 29.38% month-on-month, respectively, while imports from Pakistan edged up 0.01% month-on-month and surged 80.36% year-on-year, bucking the trend.
Air-jet spun cools, why is Pakistan yarn hot?
By category, the air-jet spun yarn (OE yarn) market is clearly cooling. Feedback from weaving mills and cotton yarn traders in Guangdong, Jiangsu, Zhejiang, and Shandong indicates that inquiries and transactions for both port-bonded and forward-shipment OE yarn have slowed, with FOB/CNF/CIF quotes from Vietnam, Indonesia, Malaysia, and India continuing to edge down. This is closely linked to terminal demand: Southeast Asian order transfers are winding down, domestic winter-spring orders have yet to materialize, and expectations of US tariff actions under Section 301 by July are making downstream buyers cautious.
However, Pakistan's 8S-21S siro-spun yarn has maintained relatively stable shipments. Multiple factors drive this: first, the medium- to long-term depreciation of the Pakistani rupee against the US dollar has directly boosted the price competitiveness of its cotton yarn exports; second, the easing of energy and power supply crises in Pakistan has raised mill operating rates, increasing export supply; third, weak domestic demand in Pakistan has forced mills to push exports, while the 'two-way flow' in cotton yarn and fabric trade between China and Pakistan has reduced transaction friction.
Exchange rates and geopolitics: two key variables
Pakistan's strong cotton yarn performance is inseparable from exchange rate and geopolitical factors. Rupee depreciation not only lowers the dollar-denominated cost of Pakistan yarn but also creates a 'restocking opportunity window' for importers. A light industry import-export company in Zhejiang noted that since mid-June, Pakistan cotton prices have corrected sharply, mills have raised operating rates after improved energy supply, and export pressure has increased, so they are waiting for further price drops to replenish stocks.
Meanwhile, the Middle East geopolitical conflict (US-Israel-Iran) has caused some low-count, low-margin textile orders to return from Southeast Asia to China. These orders are price-sensitive, and Pakistan yarn, with its stable cotton blending, shorter transport distance (compared to other South Asian countries), and price competitiveness, has become a preferred choice for these returning orders.
Implications for buyers and exporters
The current cotton yarn import market shows a pattern of 'total volume growth with structural divergence.' OE yarn faces headwinds from order gaps and tariff uncertainty, while Pakistan siro-spun yarn maintains resilience due to multiple favorable factors. This calls for more refined procurement strategies and risk assessment.