In the first half of 2026, China's cotton yarn imports surged 56.3% year-on-year, reaching a historical high. Customs data shows cumulative imports from January to June hit 1.05 million tons, with June alone recording about 170,000 tons, flat from May but up 54.2% year-on-year. Behind these numbers lies the accelerating substitution of domestic cotton yarn by imported yarns.
Price Gap Drives Import Substitution
The core driver of the import surge is the widening price gap between domestic and international cotton markets. Due to China's cotton target price subsidy policy, domestic cotton prices have long been higher than international prices. From September 2025 to June 2026, cumulative cotton yarn imports reached about 1.64 million tons, up 40.2% year-on-year, a growth rate rarely seen in the past decade.
For downstream weaving mills, using imported cotton yarn means saving hundreds to thousands of yuan per ton. In an era of shrinking profit margins for garment orders, this cost advantage is irresistible. Mills in Guangdong, Zhejiang, and Jiangsu are gradually increasing the proportion of imported yarn in their blending schemes from 30% to over 50%.
Supply Chain Impact: Who Bears the Brunt, Who Benefits
The influx of imported yarns hits domestic cotton spinning enterprises first. Small and medium-sized mills in Shandong and Henan have seen declining operating rates, with some forced to cut production or even halt operations, leading to rising inventory pressure. Meanwhile, cotton yarn traders have experienced a significant business boom, especially distributors near ports like Qingdao and Ningbo, where warehouse turnover has accelerated noticeably.
- Domestic cotton mills: face dual pressure of order loss and profit compression
- Import yarn traders: capitalize on price gap, rapidly expanding business scale
- Weaving mills: gain access to lower-cost raw materials but bear exchange rate risks
- Cotton growers: domestic cotton demand weakens, prices under pressure
Profit distribution along this chain is undergoing a fundamental shift. The once domestic-dominated supply pattern is being replaced by a dual-track system of domestic and imported yarns.
New Directions for Procurement Strategy and Investment
For buyers, the cost advantage of imported yarns is unlikely to reverse in the short term. However, delivery times for imported yarns are typically 15 to 30 days longer than domestic ones, and are more susceptible to international shipping, exchange rate fluctuations, and origin policy changes. Blindly switching supply sources may reduce supply chain resilience.
For foreign trade enterprises, this trend further weakens the competitiveness of exported cotton yarn. On the flip side, textiles made from imported yarns can benefit from tariff preferences under some free trade agreements, opening new opportunities for entrepot trade.
For Buyers - Build a price comparison model for domestic and imported yarns to dynamically adjust procurement ratios - Sign long-term contracts with import traders to lock in prices and supply stability - Monitor capacity changes in major yarn-producing countries like Vietnam, India, and Pakistan
For Cotton Spinning Mills - Accelerate product structure upgrades toward high-count and differentiated yarns - Explore direct procurement partnerships with upstream cotton plantations to cut intermediate costs - Assess the feasibility of overseas factory setups to circumvent high domestic cotton prices
The surge in imported yarns is not a short-term fluctuation but a reflection of China's textile industry repositioning itself in the global value chain. As the price gap logic persists, domestic cotton spinning can only hold its ground through efficiency improvements and product innovation.