Cotton yarn imports are surging at a pace exceeding expectations. According to the latest customs data, China imported approximately 170,000 tons of cotton yarn in June 2026, a staggering 54.2% year-on-year increase. The first-half total reached 1.05 million tons, up 56.3%, while the first ten months of the 2025/26 season saw cumulative imports of 1.64 million tons, a 40.2% increase.
These figures reflect not a short-term demand spike but a structural shift in the upstream textile chain. The price gap between imported and domestic yarn has become the decisive factor in downstream procurement decisions.
Price Gap Drives Import Substitution
The growth curve of imported yarn closely mirrors the domestic-international cotton price spread. Since the second half of 2025, international cotton prices have trended lower, while domestic prices remained elevated due to reserve policies and high planting costs. The spread once widened to over RMB 3,000 per ton. This directly translates to yarn: imported cotton yarn of the same specification is RMB 1,500-2,000 per ton cheaper at the port than domestic mill ex-factory prices.
For weaving mills, this is a clear calculation. With already thin margins on final orders, every thousand yuan saved per ton can determine whether an order is viable. Procurement managers in Guangdong's denim cluster and Zhejiang's home textile cluster report that the share of imported yarn in their raw material mix has risen from around 30% to over 50% in the first half of 2026.
Import Structure Reveals Competitive Focus
The growth in imported cotton yarn is concentrated in standard counts of Ne 32 and below, including conventional ring-spun and open-end yarns. These are the traditional strongholds of domestic spinners, featuring high capacity, low technical barriers, and thin margins. The influx of imports is shifting from marginal supplementation to mainstream substitution.
Notably, the 1.64 million tons imported in the first ten months of 2025/26 already represent nearly 30% of China's annual cotton yarn consumption of about 6 million tons. If the price gap persists, domestic spinners will lose further pricing power in staple categories.
The direct impact on domestic mills is capacity utilization. In the first half of 2026, small and medium-sized mills in the Yellow River and Yangtze River basins operated at only about 60% capacity, with some falling to 50%. Inventory pressure and import competition form a double squeeze, forcing many to cut production or shift to blended chemical fiber products.
Downstream Effects and Expectations
The import surge is cascading downstream. Price competition in grey fabric has intensified, further compressing margins on standard products. While weaving mills benefit from lower raw material costs, their bargaining power with end-brand and retailer customers has not improved—buyers are also pressing for lower prices.
Looking at the procurement pace, June's import volume was flat month-on-month, suggesting that the incremental growth has entered a high-level plateau. However, with 1.64 million tons already imported in the first ten months of the 2025/26 season, full-year imports will likely exceed 1.9 million tons, a five-year high.
For the domestic cotton textile chain, this poses a real challenge: how to hold ground through product restructuring and differentiation when the domestic-international price gap persists. The import shock will not fade naturally unless domestic cotton prices align with global levels or domestic yarn establishes an irreplaceable advantage in quality and delivery reliability.