The monthly import data for China's cotton yarn market is sending a clear signal: the traditional supply landscape is undergoing a dramatic shift. In May 2026, China's total cotton yarn imports reached approximately 172,200 tons, down 14.03% month-on-month, but imports from Pakistan bucked the trend with a slight 0.01% increase month-on-month and a staggering 80.36% year-on-year surge. This divergence reflects deep adjustments driven by geopolitical conflicts, currency fluctuations, and industrial relocation.
Structural Divergence Behind the Data
Breaking down the numbers, imports from Vietnam totaled about 82,050 tons, down 11.83% month-on-month, while imports from India were approximately 22,430 tons, a sharp 29.38% decline. Together, these two countries still account for over 60% of total imports, but their growth momentum has clearly slowed. In contrast, Pakistani yarn imports reached 21,310 tons, accounting for 12.37% of the total, and while not the largest in absolute terms, the growth trend is the most robust.
Industry analysts attribute Pakistan's rise to multiple factors. The US-Israel-Iran conflict has redirected some low-mid count, low-profit textile and apparel orders from Southeast Asia back to China, and Pakistan, with its cost advantages in low-mid count yarns, has become a primary beneficiary. Additionally, the continuous depreciation of the Pakistani rupee against the US dollar has directly enhanced the price competitiveness of its yarn exports.
Open-End Spinning's Struggle vs. Pakistan's Opportunity
In stark contrast to Pakistan's strength, open-end spinning yarn is experiencing a double decline in both volume and price. Feedback from weaving mills and traders in Guangdong, Jiangsu, Zhejiang, and Shandong indicates that inquiries and transactions for bonded and forward cargo open-end yarn are sluggish. FOB/CNF/CIF offers for open-end yarn from Vietnam, Indonesia, Malaysia, and India continue to edge lower.
This is closely tied to changes in the order mix. The wave of relocation orders from Southeast Asia is winding down, while domestic autumn-winter orders have yet to be released, creating a demand gap. Meanwhile, market expectations that the US may impose additional tariffs on Chinese goods based on Section 301 findings in July are dampening traders' willingness to build inventory.
In contrast, Pakistan's 8S-21S siro spun yarn shipments remain stable. This resilience is supported by stable cotton blending, shorter transportation distances, and weak domestic demand in Pakistan, which has forced mills to ramp up exports. A Zhejiang-based textile import-export company noted that since mid-June, Pakistani cotton prices have fallen sharply, and with improved energy and power supply, mill operating rates have risen, further intensifying export pressure. This presents a potential restocking opportunity for buyers waiting on the sidelines.
Exchange Rates and Policies: Unignorable Variables
The medium-to-long-term depreciation trend of the Pakistani rupee is a core variable underpinning the competitiveness of Pakistani yarn. For Chinese importers, this means that, at equivalent procurement costs, the cost-performance advantage of Pakistani yarn will persist. However, rupee depreciation also amplifies exchange rate risk; without hedging through forward contracts, profit margins could be eroded.
Additionally, the 'two-way trade' policy framework for cotton yarn and cotton fabric between China and Pakistan provides a stable institutional guarantee. In the context of a fragmented global supply chain, the stability of such bilateral trade is particularly valuable.
Impact on Downstream Procurement and Foreign Trade
For weaving mills, the current market environment presents both challenges and opportunities. The challenge lies in the fact that while open-end yarn prices are falling, transaction volumes are weak, indicating a lack of confidence on the demand side, necessitating more cautious inventory management. The opportunity is that Pakistani yarn's cost-performance advantage is becoming more pronounced, especially for 8S-21S siro spun yarn, which can serve as a stable alternative for low-mid count products.
For foreign trade enterprises, close attention should be paid to the implementation of US tariff policies in July. If tariffs are imposed, transshipment routes may be disrupted, but the logic of substituting with Pakistani yarn will become even clearer. Meanwhile, the window of opportunity presented by falling Pakistani cotton prices is worth seizing, but decisions should be made flexibly in conjunction with exchange rate trends.