Imported Yarn Market Polarization: The Cost and Currency Logic Behind Pakistan Yarn's Countertrend Strength

In May 2026, China's cotton yarn import market showed clear divergence. According to customs data, total cotton yarn imports stood at approximately 172,200 tons, down 14.03% month-on-month but still up 71.75% year-on-year. Behind these aggregate figures lie stark contrasts among source countries: imports from Vietnam and India fell 11.83% and 29.38% month-on-month respectively, while imports from Pakistan remained nearly flat month-on-month and surged 80.36% year-on-year, raising its share to 12.37%.

Drivers Behind Pakistan Yarn's Countertrend Growth The resilience of Pakistan yarn is no coincidence. On the cost side, the continuous depreciation of the Pakistani rupee against the U.S. dollar has directly lowered the dollar-denominated export prices of cotton yarn, creating room for Pakistani yarn in price-sensitive Chinese open-end spinning markets. Meanwhile, the easing of the power supply crisis in Pakistan has led to higher mill operating rates, increasing supply-side pressure and intensifying export competition.

Notably, the reshoring of some low-to-medium count spinning orders from Southeast Asia to China, triggered by geopolitical conflicts in the Middle East, has temporarily boosted demand for Pakistan yarn. Such orders are typically cost-sensitive, and Pakistan yarn matches well on price and delivery lead times. Additionally, weak domestic demand in Pakistan has pushed local mills to channel more capacity into exports, while the stable trade corridor and relatively low shipping costs between China and Pakistan provide infrastructure support for this trend.

Open-End Spinning Market Under Pressure In contrast to the active performance of Pakistan yarn, open-end spinning yarn prices from Vietnam, Indonesia, Malaysia, and India saw modest corrections in May. Feedback from weaving mills and traders in Guangdong, Jiangsu, Zhejiang, and Shandong indicates that inquiries and transaction volumes for both port-bonded and forward-shipment open-end yarns have slowed noticeably.

This slowdown reflects multiple factors: the Southeast Asian order reshoring wave is winding down, domestic winter-spring orders have yet to materialize, and the market is in a lull period. At the same time, expectations of additional U.S. tariffs on Chinese goods under Section 301 are leading some importers to adopt a cautious stance, preferring to wait rather than restock.

Implications for Domestic Weaving Mills The current cost advantage of Pakistan yarn is prompting domestic weaving mills to reassess their sourcing mix. The approach taken by a Zhejiang-based textile import-export company is instructive: amid consecutive corrections in Pakistan cotton prices and rising mill operating rates, the company is holding cash and waiting for a better restocking opportunity, betting that the rupee's depreciation will further lower landed costs.

For weaving mills that rely primarily on open-end yarn, short-term sourcing strategies should pay closer attention to the correlation between exchange rate movements and domestic cotton prices in Pakistan. With stable cotton blending and shorter shipping times compared to Southeast Asian sources, Pakistan yarn offers greater supply flexibility during price volatility.

For Buyers - Monitor the Pakistani rupee's exchange rate trend against the U.S. dollar to lock in forward orders during depreciation cycles and lower procurement costs. - Compare CIF quotes for Pakistan yarn versus Vietnamese and Indian open-end yarn, factoring in shipping time and letter of credit costs to assess total landed cost. - Stay alert to the actual implementation timeline of U.S. tariff policies to avoid overstocking before policy clarity, mitigating potential order fluctuations.

For Foreign Trade Enterprises - Strengthen direct engagement with Pakistani mills, leveraging tariff preferences under the China-Pakistan Free Trade Agreement to optimize import channels. - Take advantage of the window for reshored Southeast Asian orders by building moderate inventories of low-to-medium count cotton yarn, but maintain disciplined position sizing to manage uncertainty in domestic orders. - Establish currency hedging mechanisms to reduce settlement risk from rupee depreciation, while using Pakistan yarn's price advantage to expand into China's mid-to-low-end market segments.