China imported 210,000 tons of cotton yarn in March 2026, up over 60% month-on-month and 65.7% year-on-year, according to General Administration of Customs data. The first-quarter total of 510,000 tons marks a 49.8% annual increase. For the 2025/26 season (September 2025 to March 2026), cumulative imports reached approximately 1.1 million tons, up 31.0% year-on-year.
This surge is not a short-term restocking event. The primary driver is the widening price gap between domestic and international cotton. Since late 2025, global cotton prices have remained subdued due to ample supply, while Chinese cotton prices have stayed elevated due to Xinjiang cotton target price policies and quota restrictions. The spread has consistently exceeded RMB 1,500-2,000 per ton, giving imported yarn a clear cost advantage.
For coastal weaving mills, imported yarn from Vietnam, India, and Pakistan now costs RMB 1,000-1,500 per ton less than comparable domestic yarn. This margin is decisive in a market where fabric prices remain under pressure. The substitution effect is accelerating, particularly in medium-count categories like C32S and C40S carded yarn.
Trade policy uncertainty is another factor. With ongoing US-China trade tensions, many importers and large spinners have front-loaded purchases, expecting stricter cotton traceability requirements or tariff hikes later in 2026. The March surge—an additional 80,000 tons compared to February—reflects this pre-emptive buying. Port inventories in Guangdong and Jiangsu are now elevated, with bonded warehouses reporting congestion.
The demand structure is also shifting. Growth in knitted outerwear and fleece fabrics has boosted demand for price-sensitive, medium-quality yarns—precisely the segment where imported yarn excels. Domestic mills still dominate high-count combed yarn, but their market share in lower-count categories is eroding.
Downstream impacts are mixed. Small and medium domestic spinners face margin compression; some are switching to blended yarns. Import traders, meanwhile, are seeing profit margins shrink due to oversupply, with spot prices at some ports now inverted. For fabric mills, imported yarn offers cost relief but raises consistency concerns—different origins and batches can lead to variations in dyeing behavior and shrinkage.
Looking ahead, Q2 imports will likely remain high but with slower growth, as the market digests earlier arrivals and watches the Northern Hemisphere cotton planting season. The 2026/27 global crop outlook will shape subsequent import pace.