Market Report – Pakistan 14th January 2019

We just visited Heimtextil 2019 in Frankfurt Germany. Read our special feature on Heimtextil 2019 HERE.

Our Market reports are also now available on our company page on LinkedIn.

Local Cotton Highlights:

• Modest trade activity was seen in local cotton market in last week. Most of the buyers were on the sidelines ahead of Mini-budget being introduced by the government, expected to be announced on 23rd January. Also, they are waiting for the outcome of the US-China talks. Traders are now eagerly waiting for positive outcome of China-US trade negotiations, this factor will help in reviving the business activity world over which will greatly benefit Pakistan. Cotton trading circle is also expecting that the trading activity will improve after positive response from Heimtextil 2019 fair. Overall the local market tone has been soft during the week due to lack of buying interest by mills, whereas, buying interest for cotton yarn improved slightly.
• Ginners have handsome stocks with them with over 1.6 million cotton bales still remains unsold. Govt is also considering waiving off the import duty on cotton due to which ginners have showed softness in prices, but buyers didn’t show interest and looking for the positivity in international development.
• Rates were stable in the local cotton market. In the international market, prices of cotton were mixed. NYCF jumped during the meeting of china-USA delegations but later dropped on closing. Indian cotton prices remained soft. Karachi Cotton Association (KCA) spot rate maintained the level of Rs 8,700 per maund.
• Prices of seed cotton (Kapas/Phutti) in Sindh were in range from Rs 3000 to Rs 3800 per 40 Kgs, while in the Punjab the seed cotton prices reportedly ranged from Rs 3300 to Rs 3800 per 40 Kgs in local market based on quality. Prices of lint for the new crop (2018/2019) from Sindh are said to have ranged from Rs 8100 to Rs 8900 per maund (37.32 Kgs), while the lint prices from Punjab reportedly ranged from Rs 8300 to Rs 9075 per maund. Overall deals were made between the range of USC 71~80 Lbs. (8,100~9,075/ maund).

New York Cotton Futures:

• New York Cotton futures opened on upper level on Monday as compare to previous week’s closing figures.
• NYCF dropped in next session and then marched upward in two sessions, at last it dropped and closed on negative side by the end of the week.

At last day of the week, MARCH 2019 closed at 72.49 with decrease of 26 points.

At last day of the week, MAY 2019 closed at 74.03 with dropped of 7 points.

At last day of the week, JULY 2019 closed at 75.27 with reduction of 13 points.

Liverpool Index:

A was opened at 79.70 with higher level from previous week’s closing figure.

• In this week Index “A” showed fluctuations on both way and closed on positive side.
• At last day of the week, LPI “A” closed at 82.60 with increase of 290 point as of opening figure of the week.

Crude Oil:

Crude Oil prices opened at USD 48.52 with slight high level as compared to last week closing figures.

• In this week crude oil price showed rising trend in whole week, only dropped on closing, hence closed on positive side at the end of week.
• In last day of the week, Crude Oil price closed at USD 51.59 with increased of USD 3.07 cents as of opening figure of week.

Pakistan Currency Exchange Rates

• In last week values of Pak rupee showed stable trend against US Dollar’s, other major currencies showed mix trend in both Interbank and open markets.
• At the end of week, Euro closed on a positive note with figure of 1.15 and British Pound also closed on positive note with figure 1.29 against USD.

Local Yarn:

• Local yarn market increased in asking prices by Rs.2~3/lbs during this week due to good demand in coarse count from China and Heimtextil 2019 fair. A reasonable activity prevailed in market and customer booked yarn against sold fabric orders. Supplies also now in comfort zone as no one has stock or sale pressure.
• PSF price remained stable in domestic market by Ibrahim Fiber during last week ended. Crude oil prices increased, PTA, MEG prices remained same in International market during this week and China polyester prices also remained stable by end of this week. It is expected that price of polyester in domestic market will remained same for next week.
• Faisalabad trading market was active in fine cotton yarn counts and rates remained stable with limited activity. Blended yarn prices also were stable and limited activity reported by end of this week.

Following are current asking prices of yarn in local market based on ex mills:

Export Yarn:

China:

• Chinese customers were indulged in buying this week. Suppliers showed firmness in prices but later increased prices of around 2~3%. Over all suppliers are getting firm after handsome sales in last couple of weeks. Most of the suppliers have already finished February and offering onward shipments whereas average quality mills are selling end of February / early march shipments.

Other Markets:

• Slow activity has been observed in other markets. Prices showed an upward trend in term of asking and spinners were firm. In Far Eastern market, Korean customers remained quiet with no major activity. In Hong Kong market customers inquired for few inquiries but none of the deals were finalized.
• European Markets remained inactive, most of them were busy in Hemitextil 2019 fair last week. Buyers showed interest in yarn buying, and many inquiries were discussed, which are near to getting finalized soon.  Turkish buyers remained silent, only few deals of double yarns reported on lower level of prices from the needy mills.

Local Fabric:

• In the previous week the local fabric market opened in quiet tone and gradually further slowed down towards the end of the week.
• Prices remained firm throughout the week and limited activity reported in the market against limited number of inquiries received. Weavers are offering End February/early March’19 delivery for both narrow width and wider width fabrics.

Local fabric prices of regular items are as follows:

20×16/128×60=63”at USD 1.18 to 1.20 per yard, 16×12/108×56=63” in range of USD 1.25 to 1.27 per yard and 20×20/108×58=63” was sold in range of USD 0.99 to 1.01 per yard based on ex mills.

Export Fabric:

• Slow market sentiment was seen during the first half of the week from Far Eastern and Asian markets however good number of inquiries were exchanged towards end of the week. Reasonable quantity of orders was placed by Korean, Chinese, Vietnam and Japan buyers. Customers are now facing required delivery problem because suppliers have good sales position hence, they are offering about 60 days lead time whereas customers were looking for 35~40 days lead time.
• Prices remained stable during the week due to stable raw material prices. Suppliers are expecting good orders in coming days as customers have orders in hand.

Following were the closing rates based on CNF Far Eastern ports.

20×16/128×60=63”, in range of 1.10 to 1.12 per yd, 16×12/108×56=63” between USD 1.20 to 1.22 per yd and 20×20/108×5863” in range of USD 0.92 to 0.94 per yd based on CNF Far Eastern ports.

• Since most of the major European customers were attending Heimtextil 2019 fair, no considerable inquiries were exchanged during the week directly with the suppliers in Pakistan however during the fair, the business activity was good. Customers have placed program based good orders during the fair mainly for wider width. Prices for wider width were stable so no change in price was observed.
• Currently good suppliers are booked till end of March and offering April onward deliveries whereas average suppliers are booked till mid of Mar and offering end March onward deliveries. USA buyers were active and have discussed good number of inquiries during the week resultant good order placements in T180 ~ T 250. Generally wider width suppliers also have good sales position due to good demand.

Home Textiles:

• Home textile market was Slow in last week, due to Heimtextil 2019 fair as buyers and sellers were busy attending the fair.
• USA Market was also slow last week & we did not observe much activity in order placements, customer placed few orders of running Collection. European markets buying was slow & placement of order was also very limited in last week. As per forecast market will grow up from next week. Home textile articles prices were firm and did not see any significant change in prices. Suppliers were offering same prices as they were quoting last weeks. So, keeping in view current prices and market situation it seems that prices will remain firm in upcoming weeks.
• Suppliers have orders up to February, 2019 but still they are under sales pressure to fulfill their capacities at 100% they are trying get more orders from different customers / markets and to full fill their capacities suppliers are offering very sharp prices to capture bulk orders. As far as shipments are concerned supplier is offering 65 to 70 days for new orders & for repeat orders supplier are offering 50 to 65 days.

Garments:

• Apparel customers have started floating inquiries after they have come back from Christmas and New Year Holidays.
• Some basic garment orders were finalized for printing industry in EU. Apparel manufacturers have not increased their prices yet despite raw material prices going up. Factories are running in their full capacities and lead times are being offered at around ninety days depending upon the type of the garment.
• Pakistan has felt positive vibes in Apparel Industry during the past. Garments industry is dealing with many opportunities and looking forward a huge business wave coming this way. Pakistani factories are strong source base for fleece and heavy weight fabric garments.

Going Forward:

• In Local Yarn Market it is expected that market will be remain firm due to good sale of yarn within the domestic market that took place in last few weeks. Further price trends of yarn will be according to demand and supply of different counts which will lead price level.
• In Export Yarn Market China considering the current circumstances we can say that prices might rise further by 1-2% in days to come if the demand remains with what they are at current levels. In other markets good orders are expected to convert from last weeks Heimtextil fair.
• In the Local Fabric Market good activity is to be expected from last week’s Heimtextil Fair in wider width fabrics both griege and finished.
• In Export Fabric Market Business activity both for narrow width and wider width remained good during the week. Suppliers are expecting good demand from Far eastern, Asian, European and USA market in coming weeks.
• In Home Textile Market we are looking forward to many orders getting placed in wider width in the coming days as per last week’s interaction between customers and suppliers in heimtextil 2019.
• Apparel sector is going through reasonable business developments which are attracting buyers to come to Pakistan and place orders. Hence, we might see further positive developments in days to come.