China's cotton yarn imports surpassed one million tons in the first half of 2026, with a year-on-year increase of more than 50%. This figure signals a fundamental shift in the textile supply chain.
According to public data from the General Administration of Customs, June 2026 imports totaled approximately 170,000 tons, flat month-on-month but surging 54.2% year-on-year. The cumulative import volume for January-June reached 1.05 million tons, up 56.3% from the same period last year.
Why Are Imports Growing So Rapidly?
The price differential is the primary driver. For the 2025/26 season (September 2025 to June 2026), total imports reached 1.64 million tons, a 40.2% increase year-on-year. This growth rate far exceeds domestic yarn production growth, indicating that imported yarn has become a regular component of downstream mills' raw material portfolios, not just a supplementary source.
From the procurement perspective, cotton yarn from major origins such as Vietnam, India, and Pakistan has been priced 1,000-1,500 RMB per ton lower than comparable domestic yarns for most months. For grey fabric mills operating on razor-thin margins, this price gap can determine the profitability of an entire order.
Restructuring Downstream Demand
The surge in imports is no coincidence. Over the past two years, China's apparel exports have faced destocking pressures and tariff uncertainties in Western markets. Orders have become shorter, smaller, and more urgent, demanding greater flexibility in raw material delivery.
Imported yarn—especially from Vietnam—meets this demand. Vietnamese mills use imported cotton for consistent quality, and lead times from order placement to port arrival are typically 15-20 days, shorter than domestic inter-provincial transportation. This explains why imported yarn continues to gain market share, even though domestic yarn may offer superior quality in certain counts.
Another factor is currency. The RMB weakened overall in the first half of 2026, which theoretically should discourage imports. However, actual data shows that importers largely hedged against exchange rate risks through forward contracts, preserving the price advantage.
Impact on the Domestic Spinning Industry
The influx of imported yarn directly compresses the margins of small and medium-sized domestic spinning mills. Most of these mills produce standard 32s and 40s yarn, precisely the segments most affected by imports.
- Domestic mills are being forced to shift toward differentiated products, accelerating development of high-count, fancy, and functional yarns.
- Some pure cotton spinning capacity is migrating to cotton-polyester blends and new fibers like lyocell.
- The use of Xinjiang cotton is implicitly restricted in export orders, further weakening the competitiveness of conventional domestic yarns.
For the weaving sector, a higher proportion of imported yarn means greater indirect dependence on international cotton markets. Any sharp fluctuation in global cotton prices will increase uncertainty for downstream mills' raw material costs.
Outlook for the Second Half
Seasonally, July-September is typically a low season for cotton yarn imports, but this year may be different. Domestic orders for autumn/winter fabrics will start coming in after August, and current port inventories are at moderately low levels. Restocking demand is expected to re-emerge in late Q3.
A potential risk: cotton production forecasts for India and Pakistan in the 2026/27 season suggest possible downward revisions, which could lead to a phased price increase for imported yarn in Q4. For buyers with long-term orders, current price levels may present a window to lock in forward contracts.