Behind the Surge in Cotton Yarn Imports: China's Textile Industry Undergoes Structural Reshaping of Raw Material Dependence

The global cotton textile trade map is undergoing a rare rapid shift. According to data released by the General Administration of Customs for June 2026, China imported approximately 170,000 tons of cotton yarn, a year-on-year increase of 54.2%. More notably, the cumulative import volume for the first half of the year reached 1.05 million tons, with a growth rate of 56.3%. Extending the observation period to the entire 2025/26 season (September 2025 to June 2026), total imports reached 1.64 million tons, still holding a 40.2% increase.

This scale and growth rate go beyond simple seasonal restocking. It points to a more fundamental industrial reality: China's cotton textile sector is undergoing a structural leap in its dependence on imported yarn.

The Logic Behind the Surge: Cost Differentials and Capacity Shift

The direct driver of the import surge is the persistent inversion of domestic and international cotton prices. Over the past year, influenced by production cuts in major producing countries and volatile ocean freight rates, international cotton prices have remained lower than domestic prices. Southeast Asian mills, particularly in India and Vietnam, leveraging their raw material cost advantages and stable supply capabilities, have flooded the Chinese market with cotton yarn priced 5%-8% lower than comparable domestic products. For weaving mills, substituting domestic yarn with imports saves hundreds of yuan per ton in raw material costs.

Deeper changes are occurring on the capacity front. Over the past five years, Chinese textile enterprises have accelerated capacity transfers to Vietnam, Pakistan, and Indonesia. A significant portion of the cotton yarn produced by these overseas factories is sold back to the Chinese market, forming a new trade loop of 'capacity relocation, product return.' The 40% year-on-year increase in imports for the 2025/26 season is a quantitative reflection of this expanding loop.

Transmission Effects on Downstream Industries

The influx of imported yarn is reshaping the competitive landscape of the domestic cotton yarn market. For weaving and garment processing enterprises, the expanded raw material options provide greater bargaining power. However, the flip side is the sharply increased survival pressure on small and medium-sized domestic spinning mills, especially those producing low-to-medium count yarn, which face direct impact from imports. Some have already proactively reduced output or shifted to differentiated products.

Regionally, major knitting and weaving clusters in Guangdong, Zhejiang, and Jiangsu show the highest dependence on imported yarn. Weaving enterprises in these areas generally report stable delivery cycles and consistent quality from imported yarn, forming stable procurement habits for standard grades. This suggests that even if the price gap narrows in the future, this demand may not fully revert to the domestic market.

Industry Trend Judgments and Practical Recommendations

The sustainability of high import growth depends on two variables: global cotton price trends and domestic cotton reserve and quota policies. If international cotton prices remain relatively low, the cost advantage of imported yarn will persist, potentially pushing annual imports beyond 2 million tons. Conversely, if domestic policies tighten import quotas or increase reserve cotton releases, growth may slow after Q3. Long-term, however, the trend of capacity relocation and deepening industrial chain division is irreversible, and the share of imported yarn in China's cotton textile consumption will continue to rise.

For Sourcing Departments - Establish a flexible price comparison mechanism between imported and domestic yarn. Monitor forward quotes from major Indian and Vietnamese mills to lock in low-cost supplies during price windows. - Prioritize imported channels for standard grades (e.g., 32s, 40s carded yarn). Focus domestic procurement resources on differentiated and functional products. - Strengthen quality standard alignment with overseas mills. Request samples and inspection reports in advance to avoid batch-to-batch variations in color and strength affecting production.

For Foreign Trade Enterprises - Track expansion plans of Southeast Asian mills, especially the commissioning schedule of new capacity in Vietnam and Pakistan, to arrange supply chain partnerships early. - Flexibly denote 'made with imported yarn' in export orders. Some overseas buyers favor products using non-Chinese raw materials, which can be leveraged as a pricing advantage. - Closely monitor changes in China's import quota policy. If policies tighten, consider establishing overseas bonded warehouses to regulate import flow.