China's textile industry received a striking set of import data in mid-2026. Customs statistics show that cotton yarn imports in June stood at approximately 170,000 tons, flat month-on-month but surging 54.2% year-on-year. First-half cumulative imports reached 1.05 million tons, a 56.3% increase. Extending the timeline to the 2025/26 season (September 2025 to June 2026), cumulative imports hit 1.64 million tons, up 40.2% year-on-year. Behind these numbers lies a deep restructuring of the global cotton spinning chain and the pragmatic choices made by China's textile industry on the raw material front.
The explosive growth of imported cotton yarn stems primarily from the persistent price inversion between domestic and international cotton markets. Since the 2025/26 season, international cotton prices have trended lower due to global production increase expectations, while domestic prices have remained high due to reserve policies and planting cost support. This spread has directly created arbitrage opportunities for imported yarn. For downstream weaving enterprises, using imported yarn means saving thousands of yuan per ton. A deeper structural factor is the rapid expansion of spinning capacity in Southeast Asia and South Asia. Countries like Vietnam, India, and Pakistan have extensively introduced new spinning equipment, improving both capacity and quality, giving their products a clear cost-performance advantage in the low-to-medium count range (below Ne 32). The proportion of imports from these regions continues to rise. Notably, the growth is not uniform across all categories. Customs data shows that the import growth rate for carded yarn and open-end yarn is significantly higher than for combed yarn, indicating that imports are mainly targeting cost-sensitive market segments such as home textiles and denim.
The surge in imported yarn directly impacts domestic spinning operations. Companies in traditional spinning clusters like Shandong and Henan generally report that operating rates in the first half of 2026 dropped by 5-8 percentage points compared to last year. Some small and medium-sized spinners are being forced to shift to differentiated products, such as organic cotton yarn and recycled fiber yarn, to avoid direct competition. For downstream weavers and garment manufacturers, however, this is a boon for cost reduction and efficiency improvement. Fabric buyers in Guangdong and Zhejiang are increasingly including imported yarn as a standard option in their raw material mix. A grey fabric trader in Shaoxing revealed that the share of imported yarn in his procurement list has risen from 15% two years ago to about 35% currently. This cost reduction at the raw material level directly enhances the export competitiveness of Chinese textile products in the international market. From a longer-term industrial perspective, the influx of imported yarn is reshaping China's cotton textile ecosystem. Profit margins in domestic spinning are being squeezed, forcing the industry to transform towards high-count, high-density, and functional fabrics, while downstream segments gain greater cost flexibility. This pattern of 'spinning moving outward, weaving strengthening inward' represents an active or passive adjustment of China's textile industry along the global value chain.
The rapid growth in imported yarn has also sparked discussions about industrial security. Cumulative imports for the 2025/26 season have reached 1.64 million tons, and if this pace continues, annual imports could exceed 2 million tons, equivalent to about 15% of domestic cotton yarn production. Such high import dependency poses risks to downstream raw material supply in the event of international supply chain disruptions. On the policy front, the government has made adjustments to cotton import quota management. The issuance of sliding-duty quotas in 2026 increased by about 20% from last year, providing a more relaxed environment for imported cotton and yarn. However, calls for anti-dumping and countervailing investigations against low-priced imported yarn have also emerged from some industry associations, reflecting the anxiety of domestic spinners. From a market perspective, imported yarn prices have shown a slight recovery in the second quarter of 2026, mainly due to rising ocean freight costs and recovering demand in India. This suggests that the cost advantage of imported yarn may not last indefinitely, and domestic spinners need to use this window to complete their transformation.