Market Report – Pakistan 4th February 2019

To View our market report on LinkedIn Click Here.

Local Cotton Highlights:

• During last week trading volume remained comparatively low and was firm in the local market because of the conscious buying from textile and spinning mills and stable demand by ginners demands for good quality cotton.
• The prices of cotton remained stable and firm. Karachi Cotton Association (KAC) spot rate stabilized at Rs 8700 per maund. News had it that big textile groups have signed agreements on the import of three million bales of cotton from abroad because of which the buyers are not taking much interest in local cotton purchases.
• Seed cotton (Phutti) equivalent to 10.6 million bales have reached ginneries across Pakistan by February 1st, showing shortfall of 7.23 per cent compared to corresponding period of last year. Arrivals in Punjab were recorded at over 6.461 million bales showing a 10.03 per cent shortfall and over 4 million or 4,251,721 bales in Sindh registering 2.52 per cent shortfall compared to corresponding period of last year. Around 1.4 million or 1,430,394 bales were still lying with the ginneries as unsold stock.
• ICE cotton futures fell 1 percent on Friday, declining for the first week in three, on a lack of clear signs from the trade talks between the United States and China. There is no real certainty on a (US-China) trade deal, so people are sought of negative. A US trade delegation will visit China in mid-February for a new round of talks. Cotton prices fell about 8.2 percent in 2018, the first yearly decline in four years, largely due to the trade tussle between top exporter the United States and China, the biggest consumer of the natural fiber.
• Prime Minister Imran Khan has asked the concerned departments to take measures to achieve the production target of 15 million bales of cotton. It is expected that water problem will be solved to some extent in the coming season due to snowfall in the northern areas.
• Whereas Balochistan a province in Pakistan has been successful with producing Pakistan’s First Organic Cotton and held its certification ceremony with WWF representatives.
• Prices of seed cotton (Kapas/Phutti) in Sindh were in range from Rs 3000 to Rs 3500 per 40 Kgs, while in the Punjab the seed cotton prices reportedly ranged from Rs 3000 to Rs 3600 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 9000 per maund. Overall deals were made between the range of USC 71~79 Lbs. (8,100~9,000/ maund).

New York Cotton Futures:

• New York Cotton futures opened at lower level on last Monday as compared to previous week’s closing figures.
• NYCF marched upward in this week and dropped in last two sessions, hence closed on negative side by the end of the week.

At last day of the week, MARCH 2019 closed at 73.64 with fall of 21 points.

At last day of the week, MAY 2019 closed at 74.93 with decreased of 39 points.

At last day of the week, JULY 2019 closed at 76.21 with low of 43 points.

Liverpool Index:

A was opened at 82.60 with lower level from previous week’s closing figure.

• In this week Index “A” showed mix trend and fluctuated in a both ways and closed on positive side.
• At last day of the week, LPI “A” closed at 83.70 with increase of 110 point as of opening figure of the week.

Crude Oil:

Crude Oil prices opened at USD 51.99 with low level as compared to last week closing figures.

• In this week crude oil price showed rising trend in whole week and closed on positive side at the end of week.
• In last day of the week, Crude Oil price closed at USD 55.26 with increased of USD 3.27 cents as of opening figure of week.

Pakistan Currency Exchange Rates

• In last week values of Pak rupee slightly improved 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 1.14 and British Pound closed on negative note with figure 1.31 against USD.

Local Yarn:

• Local yarn market remained stable in term of asking with limited business activity. Most of spinners were in comfortable zoon and were selling on their price with marginal delivery position. Coarse count was short in dispatch due to most mill production shifted on export siro sale towards China. Weavers also floated urgent required yarn delivery only.
• PSF price increased by Rs.3/kg on 28th Jan 2019 in domestic market by Ibrahim Fiber due to good demand in local polyester fiber. Crude oil, PTA, MEG prices remained same in International market during this week and import polyester price 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 slow in fine counts and stable in blended yarn counts and limited activity reported. Most of trader selling their stocks and buying very limited or only required counts.

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

Export Yarn:

China:

• Chinese customers remained under holiday mood.  There is a silence from buyers due to new year’s celebrations. However, main focus of customers was on opening LCs and taking on time shipments for booked orders. No business activity will be witnessed unlike last year where despite new year holidays business was open. Major reason is handsome buying form customers in last couple of weeks. Suppliers on the other hand are under comfortable zone as well. All suppliers already have LC’s of February shipments and their main focus is making shipments on time to get further orders for march.
• It is expected that there will be handsome activity once customers are back from holiday in Mid-February

Other Markets:

• Limited activity has been noticed in Export Yarn Market. Prices remained stable in terms of asking but spinners were much interested to receive the final bids from buyer’s side to catch every possible order. On the other hand, spinners are comfortability booked till End March / April.
• In Far Eastern market, Korean customers remained quiet with no major activity. For Pakistan this market is certainly having very less potential as far as Yarn is concerned. Most of the top-quality suppliers are already working to find new markets that were once targeting Korea to fulfil the gap of selling to Korean Market. As far as Hong Kong market is concerned, customers inquired for good quantities, however, asking for the prompt deliveries due to which very few orders were finalized. Traders were showing interest in booking of good quantities. Overall Hong Kong market picked up as compared to last weeks.
• European Market remained active as compared to last two weeks and floated good number of inquiries during the start of previous week. They were interested to place the orders but very reluctant to buy the bulks. So, despite of demand, no bulk business has been materialized but certainly this market behaved better as compared to the rest of the markets. Turkish buyers remained silent with only few deals of double yarns reported on lower level of prices from the needy mills.
• Few inquiries of core spun and slub yarns received from Bangladesh  in coarser  counts. However, business was slow.

Local Fabric:

• In current week under review the local fabric market maintained firm posture throughout the week. Weavers further strengthened and consolidated their positions for both narrow and wider width fabrics.
• Weavers booked limited orders at their desired inflows and did not show much flexibility in their asking prices. Currently weavers are booked till mid-March’19 for narrow width and end March/early April’19 for wider width fabrics and offering onward deliveries. Even special looms are booked till end April/Mid-May’19 .

Local fabric prices of regular items are as follows:

20×16/128×60=63”at USD 1.17 to 1.19 per yard, 16×12/108×56=63” in range of USD 1.24 to 1.26 per yard and 20×20/108×58=63” was sold in range of USD 0.98 to 1.00 per yard based on ex mills.

Export Fabric:

• Far Eastern markets remained slow during first half of the week however markets took momentum towards end of the week. Good number of inquiries were exchanged by Korea, China and Vietnam resultant good booking for basic items. Average business was noticed from Indonesia, Bangladesh and Sri Lanka. Asking prices were stable with firm tone because of firm raw material prices. Suppliers have good sales position since last couple of months hence they are offering end March ~ mid April onward deliveries. It is expected that market activity will remain slow during next week due to holidays in Far Eastern sectors.
• European customers were active during the week under review. Suppliers got good inquiries from Germany, Italy, Portugal and France hence they placed good quantities both in narrow and wider. USA customers were also active thus they have placed good quantity of orders in the market. Due to continuous support from Europe and USA, suppliers are now offering end April onward deliveries for wider width fabric. Considering good demand since last couple of months, some of the weaving units are planning to expand their production capacities both in narrow and wider width. It is forecasted that suppliers will receive good orders in coming days from Europe and USA markets and prices may remain stable as well.

Home Textiles:

• Home textile market remained active in last week. Customers started to place new orders after Heimtextil 2019 exhibition, Customers floated good inquiries in the market. USA Market was also active in last week & customer placed new orders for their running and new Collection. European market buying also picked up & customers started to place good orders. As per the forecast market is growing up.
• Home textile articles prices were firm and no change is observed in prices as compared to the last week. Suppliers were offering good prices to capture the orders.  So, keeping in view current prices and market situation it seems that prices will remain firm in upcoming weeks and there will be no significant change in prices. Suppliers have orders up to March, 2019 but they are under sales pressure to fulfill their capacities 100%. As far as shipments are concerned supplier are offering 65 to 70 days for new orders & for repeat orders supplier are offering 50 to 65 days.

Garments:

• This year began with high hopes for Pakistan textile apparel industry in finding big time attraction to take leading role in establishing the South Asian region. There would be a stiff competition between regional contenders within the sphere of apparel manufacturing in the country. Pakistan is looking forward to taking bold initiatives to mark its signature in the regional apparel arena by building the competitive edge over “Value” as oppose to “Volume”. The industry has brought the change with the introduction of innovative technology, wearable electronics, eco-friendly fabrics to further strengthen the areas of design management, inventory management and product life cycle management. Garment factories have started showing their concern to grab further orders as after Christmas and New Year holidays big placements are not observed yet.
• To keep their productions floor in running they have not increased their prices even after devaluation of Pak Rupee against US Dollars during last couple of months. Lead times are being offered from sixty to ninety days depending upon the type of the garment.

Going Forward:

• In the Local Yarn Market, it is expected that market will remain stable and firm, due to good activity in yarn and fabric for both domestic and export market. Further price trends of yarn will be according to demand and supply of different counts which will lead price level.
• In Export Yarn market, Chinese market remained under lackluster business activity due to holidays sentiment. We might see activity for march orders placements after holidays in mid-February. Whereas in other markets business activity remained mixed as the Far eastern customers have sent limited inquiries resultant limited booking during the week. European buyers were active and suppliers got reasonable orders from Europe both in regular and specialized yarns. It is expected that yarn business will remain active in days to come.
• Local fabric market is expected to trade in positive territory so firm sentiments will prevail in coming weeks.
• In Export Fabric Market business activity was good from all sectors including Far East, Asia, Europe and USA. Suppliers are expecting good orders in coming days from Europe and USA whereas Fare astern markets will remain quite due to holidays. Prices were stable with firm tone and expected to remain stable in coming days as well.
• In Home Textiles market overall it has been in terms of business activity as per forecast market will boost up and customers will make decisions to buy in bulk quantities because prices will remain at current level in coming weeks.
• It’s ideal time to place garment orders in Pakistan as prices are economical and factories can offer fastest lead times depending upon the type of garments.