Surge in Cotton Yarn Imports: What H1 2026 Data Reveals About Textile Industry Dynamics

In the first half of 2026, China imported 1.05 million tons of cotton yarn, a year-on-year increase of 56.3%. June alone saw 170,000 tons, flat month-on-month but up 54.2% annually. These customs figures highlight not just trade volume growth but fundamental shifts in the textile supply chain.

Drivers: Cost and Structure

The primary driver is the persistent international-domestic cotton price gap. Global cotton prices, influenced by ample supply, remain below China's domestic spot prices, making imported yarn more cost-effective. Coastal weaving mills increasingly prefer imported yarn over domestic cotton for spinning.

Structurally, imports are dominated by medium-to-low count carded and open-end yarns, used in denim, home textile bases, and some knits. The 2025/26 season (Sept 2025-June 2026) cumulative imports exceeded 1.64 million tons, up 40.2% year-on-year, indicating a long-term shift.

Impact on Domestic Spinning

Surging imports pressure small and medium domestic spinners, especially in Shandong and Henan clusters, facing order losses and underutilized capacity. Many are pivoting to differentiated products like high-count, melange, or functional blended yarns to avoid direct competition.

Conversely, stable import supply offers downstream weavers and garment makers flexible raw material combinations. They can switch between domestic and imported yarns based on order lead times and costs, enhancing supply chain agility.

Reflecting Downstream Demand

The import surge mirrors structural demand changes. Fast-fashion brands' cost pressure and e-commerce's demand for quick reorders push buyers toward standardized, reliable imported yarns.

Favorable RMB exchange rate in H1 2026 further lowered import costs. However, a potential reversal in H2 could dampen demand, leading to a temporary import dip.

Practical Recommendations

For Procurement - Establish a dynamic price comparison mechanism between domestic and imported yarns, adjusting procurement quotas based on price gaps. - Monitor supply and logistics in key origins like Vietnam, India, and Pakistan to avoid single-source disruptions. - Use domestic high-end yarns for premium orders ensuring quality consistency; leverage imported yarns for bulk standard orders.

For Foreign Trade Firms - Include raw material price fluctuation clauses in export contracts to share import cost risks with buyers. - Utilize imported yarn cost advantages to enhance final product competitiveness in Southeast Asian and African markets. - Monitor domestic capacity consolidation; if supply tightens, import dependency will rise, requiring long-term supply agreements.