Cotton yarn imports into China are surging at a pace rarely seen in recent years. According to the latest data from the General Administration of Customs, June 2026 imports reached approximately 170,000 tons, a year-on-year increase of 54.2%. Behind this number lies the pressure of supply-demand rebalancing that the domestic cotton textile chain is now facing.
Import Volumes Exceed Historical Norms
First-half cumulative imports totaled 1.05 million tons, up 56.3% year-on-year, meaning an average of 175,000 tons of imported cotton yarn entered the domestic market each month. More strikingly, the 2025/26 season (September 2025 to June 2026) has already seen cumulative imports of 1.64 million tons, a 40.2% increase. At this pace, the full-season total is likely to exceed 2 million tons, a multi-year high.
By source, Vietnam, India, and Pakistan remain the top three suppliers. Vietnamese yarn, with zero-tariff advantage and consistent quality, is expanding its share in mid-to-high-end knitting yarn segments, while Indian yarn competes directly with domestic products in low-to-mid count categories. This shift means Chinese mills face not only overcapacity but also price pressure from Southeast Asia.
Logic of Domestic Yarn Price Pressure
The transmission path is clear: large volumes of low-priced imported yarn enter circulation, directly pulling down the average spot price of cotton yarn. For instance, the landed price of imported 32s carded yarn is about 800-1,200 RMB/ton lower than its domestic counterpart, a gap that has persisted for three months. For weaving mills, this cost advantage makes imported yarn more attractive, diverting orders away from domestic spinners.
Inventory pressure is also building. By mid-July, stocks at major domestic cotton yarn warehouses were about 15% higher than at the start of the year. Some mills have seen inventory turnover days extend from the normal 20 days to over 35 days. Mills are forced to cut prices to destock, but downstream buyers remain cautious, creating a negative spiral of "falling prices, no buying."
Regional and Product Differentiation
Different regions and product segments are experiencing vastly different impacts. In Guangdong's Zhangcha and Zhejiang's Lanxi, hubs for knitting yarn, the share of imported yarn has risen from about 30% in 2024 to over 40% now. Local small and medium mills report operating rates falling to around 60%. In Shandong and Henan, which focus on pure cotton combed yarn, the substitution effect is weaker, but even large mills face shrinking margins.
By yarn type, the import shock is concentrated in the 16s to 40s low-to-mid count range. High-count yarn (60s and above) still faces low import substitution due to technical barriers and raw material requirements, but its overall demand is limited and cannot offset the decline in mainstream products.
Policy and Market Dynamics
The surge in cotton yarn imports is underpinned by a persistently wide domestic-international cotton price spread. In the 2025/26 season, China's target price subsidy policy kept Xinjiang cotton prices relatively high, while international cotton prices trended lower due to global production increase expectations. The spread has widened from 1,500 RMB/ton at the start of the year to about 2,500 RMB/ton now, directly boosting the competitiveness of imported yarn.
Some industry voices have called for adjustments to the sliding-duty quota release schedule or stricter inspection standards for imported yarn, but no tightening signals have emerged from the policy side in the near term. This suggests that the cost advantage of imported yarn will persist at least until the next cotton season.