Surge in Cotton Yarn Imports in Q1 2026 Signals Inventory Pressure on Weaving Sector

Cotton yarn imports into China are flooding in at a pace not seen in nearly two years. According to the latest data from the General Administration of Customs, March 2026 imports reached approximately 210,000 tons, up 80,000 tons month-on-month (over 60% increase) and 65.7% year-on-year.

Import Volume and Pace

First-quarter cumulative imports totaled about 510,000 tons, up nearly 50% from the same period last year. Looking at the longer cycle, the first seven months of the 2025/26 season (September 2025 to March 2026) saw cumulative imports of 1.1 million tons, a 31% year-on-year increase. This trajectory suggests the full-season import volume will likely hit a multi-year high.

Monthly data shows relatively stable imports in January and February, followed by a sharp jump in March. This concentrated arrival pattern is typically linked to increased price competitiveness of overseas cotton yarn and the overlapping delivery cycles of orders placed by Chinese traders. Offers from major origins—India, Vietnam, and Pakistan—declined steadily in early 2026, with the domestic-foreign price spread widening to over 1,000 yuan per ton at times, significantly boosting import appetite.

Industrial Impact

The import surge is already impacting the domestic cotton textile chain. Upstream, imported yarn is substituting domestic production, putting pressure on mill operating rates and sales. Some small and medium-sized spinning mills have begun proactively cutting prices to reduce inventory. At the intermediate trader level, port inventories are climbing rapidly. Major import hubs such as Qingdao, Guangzhou, and Zhangjiagang are reporting near-record cotton yarn stockpiles.

Downstream weaving and garment factories have reacted with a lag. Operating rates in major weaving clusters in Jiangsu, Zhejiang, and Guangdong remain at 60-70%, without significant decline. However, a telling signal is that weaving mills are shortening their raw material stocking cycles, shifting to a just-in-time purchasing approach. This indicates downstream players are adopting a wait-and-see attitude toward future prices and are unwilling to bear inventory depreciation risks.

Equally noteworthy is the changing product mix of imported yarn. The share of high-count and combed yarns is rising, directly challenging the domestic mid-to-high-end yarn market. Previously, imported yarn mainly competed in the low-count carded segment; now competition is spreading into higher-margin niches.

Practical Recommendations

For Buyers - Current imported cotton yarn supply is ample, offering significant room for price negotiation. Buyers can push for lower prices but should watch for potential distress sales as port inventories build. - Shorten individual order lot sizes and increase order frequency to mitigate price volatility risk. For forward delivery orders, consider locking in some raw material costs. - Monitor supply instability from Pakistan due to domestic cotton price fluctuations and consider diversifying source countries.

For Foreign Trade Companies - Exporters of cotton yarn or fabric should note that the import surge may trigger anti-dumping or safeguard investigation risks, especially against Indian and Vietnamese yarn. - Exploit the domestic-foreign price spread for arbitrage between imported and domestic yarn, but keep position sizes under control. - Track the secondary impact of RMB exchange rate volatility on import costs. With recent two-way fluctuations intensifying, forward forex settlements are advisable to lock in margins.