Surge in Cotton Yarn Imports Puts Domestic Textile Industry Under Capacity and Price Pressure

In June 2026, China imported approximately 170,000 tons of cotton yarn, up 54.2% year-on-year, according to data released by the General Administration of Customs on July 18, 2026. This marks another month of elevated import volumes, signaling a structural shift in the domestic cotton yarn market.

Data Trends: Why Imports Keep Rising

The June figure was flat month-on-month but surged over 50% compared to the same period last year. The first half of 2026 saw total imports of 1.05 million tons, up 56.3% year-on-year. For the 2025/26 season (September 2025 to June 2026), cumulative imports reached 1.64 million tons, a 40.2% increase.

These numbers point to a sustained penetration of imported yarn into the Chinese market. Growth above 40% over a full season suggests overseas mills are not temporary fillers but permanent competitors for market share.

The driving force is clear: international cotton prices have remained below domestic levels since late 2025, giving mills in Vietnam, India, and Pakistan a cost advantage. Chinese spinners face high raw material costs and weak downstream demand, making imported yarn an attractive option for fabric manufacturers.

Industry Impact: Winners and Losers

The main beneficiaries are coastal weaving clusters in Guangdong, Zhejiang, and Fujian. These regions, which rely heavily on medium-to-low count cotton yarn, benefit from the price and delivery reliability of imports, helping maintain factory utilization.

The losers are inland spinners, particularly those using Xinjiang cotton. Imported yarn has directly squeezed their market share. Since the 2025/26 season, some small and medium-sized mills have reduced production or shut down, accelerating industry consolidation.

For the upstream cotton market, imported yarn substitution dampens domestic consumption growth. Despite high Xinjiang cotton output, sustained high imports may lower annual consumption estimates, capping cotton price upside.

Downstream, the price advantage of imported yarn is forcing domestic mills to adjust product mixes. Competition in low-count yarns is intense, pushing some firms toward high-count combed yarn, color-spun yarn, and functional blends to avoid direct price wars.

Practical Recommendations

For Buyers - Monitor the price spread between imported and domestic yarn. Use futures to lock in forward costs and avoid concentrated purchases when the spread narrows. - Diversify supplier base beyond Vietnam and India. Evaluate yarn from Indonesia and Bangladesh for quality and delivery reliability. - Strengthen quality inspection, especially evenness and strength, to ensure imported yarn meets order specifications and prevent fabric defects.

For Spinners - Accelerate product upgrades away from 32s and 40s counts, moving toward high-count, high-value, and differentiated products. - Optimize raw material mix by blending recycled polyester, lyocell, or other non-cotton fibers to improve cost performance and uniqueness. - Explore overseas production bases in Southeast Asia or Central Asia to leverage local raw materials and tariff advantages, turning from import victim to global player.