Market Report – Pakistan 4th March 2019

Local Cotton Highlights:

• Last week, textile and spinning mills showed little interest in the buying of good quality cotton. We can say that modest trend was seen in market due to India-Pakistan tension on borders and a decrease in the production of cotton in both India and Pakistan. The local cotton market witnessed some improvement in the business of cotton yarn and textile products but there is a complaint of a financial crunch in the market.
• Cotton ginners after waiting for the increase of prices started selling their stock due to increasing tension between Pakistan and India while the textile and spinning mills have started buying cotton of their need.
• Prime Minister has showed his concern over the decrease in the cotton production. He has asked the concerned departments to take measures to achieve the production target of 15 million bales of cotton in the year 2019-20. Concerned departments, has requested Prime Minister to support price of Cotton Seed Rs 3500 per 40kg for the year 2019-20. He also requested to buy five million cotton bales. An announcement in this regard is expected next month.
• The announcement of support price of cotton or fix Indicative price system will be helpful in increasing the production of cotton. This factor will encourage farmers and they will take interest in increasing the production of cotton. so immediate implementation is required of this act because sowing season of cotton will start in Sindh soon.
• During the last week, the prices of cotton largely remained stable during the week over and no major change was observed. The Karachi Cotton Association (KAC) spot rate closed on the level of Rs 8600 per maund. ICE cotton futures climbed up, lifted by optimism over a possible trade deal between the United States and China, and fund buying. Trump and his Chinese counterpart Xi Jinping to sign a final trade deal could happen as soon as mid-March. The United States is the world’s biggest cotton exporter, while China is the top consumer. US and China still have hard work ahead to secure a pact not only to end the dispute
• PCGA issued report and showing Arrival:1,07,41,381 bales which is comparatively less around 6.80 % from last year. Last year at same time arrival was 1,15,24,581 showing difference 783,200 bales.
• 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 7700 to Rs 8700 per maund (37.32 Kgs), while the lint prices from Punjab reportedly ranged from Rs 7800 to Rs 8700 per maund. Overall deals were made between the range of USC 68~76 Lbs. (7,700~8,700/ maund).

New York Cotton Futures:

• New York Cotton futures opened with higher level on Monday as compare to previous week’s closing figures.
• NYCF dropped in next session, later marched upward till closing and closed on positive side by the end of the week.

At last day of the week, MAY 2019 closed at 73.85 with increased of 75 points.

At last day of the week, JULY 2019 closed at 74.85 with upsurge of 52 points.

At last day of the week, OCT 2019 closed at 74.52 with upsurge of 64 points.

Liverpool Index:

A was opened at 82.85 with improved level from previous week’s closing figure.

• In this week Index “A” showed downward trend in this week, hence slightly improved on closing and closed on negative side.
• At last day of the week, LPI “A” closed at 80.35 with decrease of 250 point as of opening figure of the week.

Crude Oil:

Crude Oil prices opened at USD 55.48 with low level as compared to last week closing figures.

• In this week crude oil price showed upward trend in whole week, while dropped on closing only and closed on positive side at the end of week.
• In last day of the week, Crude Oil price closed at USD 55.80 with increased of USD 0.32 cents as of opening figure of week.

Pakistan Currency Exchange Rates

• In last week values of Pak rupee showed fluctuation 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 also closed on positive note with figure 1.32 against USD.

Local Yarn:

• Local yarn market remained firm during this week ended. Fine cotton yarn counts in most of the mills saw increase in calling prices by end of the week due to tense trade with Indian Import market. Good activity was floated in the market and reasonable sale made by mills. Most of weavers were in hurry to cover yarn against their sold fabric orders.
• PSF price remained same during this week ended. PTA, MEG and Crude oil prices gradually increased from last two weeks. Import price for fiber remained firm during this week and it is expected that local fiber price will remains stable and firm.
• Faisalabad trading market was active and good buying reported for Fine counts 40/1cd and 52/1cd, Viscose yarns, active for blended yarn counts increased by Rs.1~2/lbs and good business finalized.

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

Export Yarn:

China:

• Export yarn china market remained under nominal business activity. Customers floated limited numbers of enquiries against which order confirmation was also dull. Major reason for slow business activity was high asking prices from suppliers as they are getting better prices in domestic market.
• On the other side, Chinese domestic market is slow which is why they are not showing any interest on higher prices. However, few deals were matured where suppliers matched customers desire levels.

Other Markets:

• Improved activity has been noticed in Export Yarn Market. Prices remained firm in terms of asking and spinners were interested to receive the final/improved bids from the buyer’s side. In Far Eastern market, Korean, HK, Indonesia, Vietnam Etc reasonable level of activity was noticed.
• European Market remained active and good amount of inquiries were received. Most of the customer improved their bids and finalized requirements. Indian spinners showed great interest to sell, with asking prices in India improved in last two weeks.
• Turkish buyers remained silent only few deals of double yarns reported on lower level of prices from the needy mills.

Local Fabric:

• Local fabric market closed on strong footing whereas prices showed steady and firm trend for both narrow and wider width fabrics.
• Weavers received limited inquiries throughout the week therefore market remained slow and negligible business activity reported in the market. Narrow width looms are booked till mid April~3^rd week April and wider width looms are booked till end April and onward deliveries are available with all major weavers

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 0.98 to 1.00 per yard based on ex mills.

Export Fabric:

• Another week went slow from Fareastern markets as customers are not taking interest in fresh buying. Just limited inquiries were exchanged from Korea, Indonesia, Vietnam and China but no considerable business was noticed.
• Asking prices were firm with increasing trend due to increase in raw material prices. Suppliers have good sales position since last couple of months. Good suppliers are booked till end of April and offering early May onward deliveries whereas average suppliers are booked till mid of April and offering end April onward deliveries. It is forecasted that business activity may remain slow for another week however prices are expected to remain firm.

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

20×16/128×60=63”, in range of 1.12 to 1.14 per yd, 16×12/108×56=63” between USD 1.22 to 1.24 per yd and 20×20/108×5863” in range of USD 0.94 to 0.96 per yd based on CNF Far Eastern ports.

• There was good flow of inquiries from all of the European sectors for basic ~ high thread counts both in narrow and wider width fabric. Despite of good number of inquiries during last couple of weeks, customers are considering to place the orders thus no bulk orders were noticed during the week. Prices for wider width fabric were stable and firm. Suppliers are booked till mid of May for wider width and offering end May ~ early June onward deliveries. It is expected that European customers will start placing orders from next week to get the available deliveries. Good number of inquiries were exchanged by the USA customers as well however orders are still under discussion stage. Suppliers are hopeful to get good quantity of orders from USA in coming days.

Home Textiles:

• Home textile market was firm in last week. Customer floated limited inquiries in the market, few inquiries were just for prices checking. Ratio of business maturity was limited as compared to the last two weeks.
• USA Market was also slow in last week because customer is waiting for the Market week which will take place in March 2019. Customers will place new orders after Market week exhibition keeping in view new trends which supplier present during the week.
• European market buying was also firm & business maturity was slow as compared to the last two weeks.
• No change in prices has been observed as compared to the last few weeks. Suppliers were offering good prices to capture the orders due to minimal activity. Suppliers have orders up to Mid-April, 2019 but they are under sales pressure to fulfill their capacities at 100%. 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:

• Pakistan Apparel Industry is observing consistent seasonal loading from different markets of the world. Many OV lines (outstanding value) or the core programs are being materialized with renowned retailers.
• All huge groups have already booked their periodic placements. This lead will further strengthen the industry’s core strength which is predominantly cotton rich fabrics as well as the finishes and washes.
• High fashion end stream is getting good attraction too and this percentage of business will certainly contribute in value added business.
• Price points have been one for the main interest of the buyers. Factories have space to offer deliveries from sixty days onward for basic items and for fashion items lead time is being offered from eighty days to ninety days.

Going Forward:

• In local yarn market it is expected that market will be remain stable and firm, due to good activity done in domestic market of yarn and looms are also sold massive for future orders. Further price trends of yarn will be according to demand and supply of different counts which will lead price level.
• In Export Yarn China Market all suppliers are moving to China for yarn expo in coming weeks. So, it is expected that further order confirmations will be made during the fair. In Other Markets Business activity remained better during the week. European buyers confirmed many deals keeping in view the firm price trend of the market. Most of the spinners are comfortably booked till end of April. It is expected that market will pick up further in next week.
• The local fabric market may tend to show firm posture as weavers consolidated their positions owing to firm booking in hand for coming weeks for all fabric widths.
• In Export Fabric Market Fareastern markets remained dull and slow for another week and expected to remain slow in next week as well. USA and European customers have exchanged various number of inquiries both in narrow and wider width fabric for basic to high end qualities which are expected to conclude during coming days. Suppliers have good sales coverage for next 60 days at least for narrow width and 70~75 days of wider width fabric.
• Home Textiles market was slow but in coming days situation will be improve due to upcoming Market Week in the USA.
• Pakistan’s apparel industry is getting attractions from customers across the globe and good demand is coming from different countries. Hence, we might see further improved activity in days to come.