The imported cotton yarn market is undergoing a clear divergence. According to China Customs data, China imported approximately 172,200 tons of cotton yarn in May 2026, down 14.03% month-on-month but still up 71.75% year-on-year. While the total volume remains high, significant structural differences have emerged: imports from Vietnam and India fell 11.83% and 29.38% month-on-month respectively, while imports from Pakistan inched up 0.01% and surged 80.36% year-on-year.
Multiple Drivers Behind Pakistan Yarn's Strength
The rising competitiveness of Pakistani cotton yarn is no coincidence. First, the persistent depreciation of the Pakistani rupee against the U.S. dollar has directly lowered export costs, creating a price advantage in FOB/CNF/CIF quotes. Second, weak domestic demand for textile-grade cotton in Pakistan has forced mills to increase export volumes to digest capacity. More critically, geopolitical conflicts involving the U.S., Israel, and Iran have diverted some low-to-medium count, low-margin apparel orders from Southeast Asia back to China, and these orders favor Pakistan's siro-spun yarn. Additionally, Pakistan's stable cotton blending, shorter shipping distances, and faster delivery times offer clear supply chain convenience for Chinese weaving mills.
Air-jet Spinning Faces Volume and Price Slump
In contrast to the active Pakistan yarn market, air-jet spun yarn is under pressure. Feedback from weaving mills and yarn traders in Guangdong, Jiangsu, Zhejiang, and Shandong indicates that inquiries and transactions for bonded and forward-shipment air-jet spun yarn have slowed notably. FOB/CNF/CIF quotes for air-jet spun yarn from Vietnam, Indonesia, Malaysia, and India continue to edge down. Two factors are at play: first, the wave of orders transferred from Southeast Asia to China is winding down, weakening the earlier demand support; second, domestic winter-spring orders have yet to be placed, dampening downstream purchasing appetite. Meanwhile, expectations of U.S. tariff increases under the Section 301 investigation in July are also curbing traders' willingness to build inventory.
Exchange Rate and Policy Variables in Play
Pakistani cotton prices have corrected sharply since mid-June, and with easing energy and power supply constraints, mill operating rates have rebounded, further increasing export pressure. A trading company in Zhejiang reported that some traders have opted to wait on the sidelines for a better entry point to restock Pakistan yarn. This suggests that if the rupee continues to weaken and Pakistan cotton prices remain low, the cost advantage of Pakistan yarn could widen, potentially displacing Vietnamese and Indian yarns. For Chinese importers, exchange rate volatility and tariff uncertainty are becoming the core variables determining procurement timing.