Import Yarn Market Divergence: Pakistan's Rise and the Concerns of Open-End Spinning

In May 2026, China's cotton yarn import market presented a notable divergence: total volume dropped 14.03% month-on-month but soared 71.75% year-on-year. Behind this contrast lies a deep adjustment in trade flows and product mix. Pakistani yarn emerged as the biggest highlight, with stable month-on-month volume and an 80.36% year-on-year surge, while traditional suppliers like Vietnam and India saw double-digit declines.

Event Background

Customs data shows China imported about 172,200 tons of cotton yarn in May 2026. Vietnam accounted for 47.63%, down 11.83% month-on-month; India held 13.02%, plunging 29.38%. Pakistan, with a 12.37% share, posted a slight 0.01% month-on-month increase and an 80.36% year-on-year gain, indicating its rapid market share expansion in low-to-mid count yarns.

Multiple factors drive this surge. Geopolitically, Middle East conflicts diverted some low-margin textile orders from Southeast Asia back to China, indirectly boosting demand for Pakistani yarn. Economically, the Pakistani rupee's depreciation against the dollar directly lowered export prices. Weak domestic demand forced mills to increase exports. Additionally, the 'two-way' cotton yarn and fabric trade between China and Pakistan, along with stable cotton blending and shorter transport distances, enhanced its competitiveness.

Industry Impact

The open-end spinning yarn market is experiencing price and volume declines. Feedback from weaving mills and traders in Guangdong, Jiangsu, Zhejiang, and Shandong indicates that transferred orders from Southeast Asia are winding down, while domestic winter-spring orders have yet to commence. Coupled with anticipation of US Section 301 tariffs in July, inquiries and transactions for bonded and forward open-end yarn have slowed. Prices from Vietnam, Indonesia, Malaysia, and India continue to edge down.

In contrast, Pakistani 8S-21S siro-spun yarn shipments remain relatively strong. A Zhejiang-based import-export company noted that Pakistani cotton prices have corrected sharply since mid-June, and mills' operating rates are recovering as energy and power supply issues ease, increasing export pressure. The rupee's medium-term depreciation trend has led buyers to wait for restocking opportunities.

What does this mean for downstream buyers? For factories producing denim, workwear, and home textiles, Pakistani yarn's cost advantage is growing. The open-end yarn slump, however, reflects a short-term vacuum in global textile orders and risk aversion due to trade policy uncertainty.

Practical Recommendations

For Procurement Teams - Monitor Pakistani cotton price trends and rupee exchange rate fluctuations; the current correction offers a window for long-term contracts at lower prices. - Remain cautious on open-end yarn; prioritize small, short-term orders to avoid inventory depreciation from tariff changes. - Evaluate the impact of Pakistani yarn's cotton blending stability on final product quality, especially in colorfastness and strength-sensitive orders.

For Foreign Trade Companies - Adjust import source mix by increasing Pakistani yarn's share in low-count product lines to counter competition from Vietnam and India. - Strengthen trade ties with Pakistani mills, leveraging bilateral agreements and transport advantages to reduce overall costs. - Closely monitor US Section 301 tariff details in July and plan tax strategies for bonded warehouse inventory.