Market Report – Pakistan 2 Sep 2019

Local Cotton Highlights:

• In the local cotton market, the first two, three days of the week saw an increasing trend in the trading volumes. Although mills were interested to make deals of fine quality but heavy rains disconnected the activity.
• International market showed mix trend as NYCF remained firm but also at an upward trend. The Karachi Cotton Association (KCA) spot rate (2019-2020) remained firm at the levels of 8000 per maund. The prices of cotton remained stable in China but the bearish trend was seen in India. The China and America trade conflict is not only affecting the trade activities of these countries but the trade activities of many other countries as well.
• It seems that activity will improve in coming days as all mills will chase fine quality lint to cover their requirements and this may raise the prices further.
• Prices of seed cotton (Kapas/Phutti) for the new crop (2019-2020) in Sindh were in range from Rs 3500 to Rs 3800 per 40 Kgs and new crop phutti is available from Sindh in range from Rs 7750 to Rs 8300 per maund (37.32 Kgs).
• In Punjab prices of seed cotton was in range from Rs 3600 to Rs 4000 per 40 Kgs and new crop phutti is available from Punjab in range from Rs 7850 to Rs 8400 per maund (37.32 Kgs). Overall deals were made between the range of USC 60~65 Lbs. (7,750~8,400/ maund).

New York Cotton Futures:

• New York Cotton futures opened on lower levels on Monday as compare to previous week’s closing figures.
• NYCF showed upward trend in this week and closed on positive side by the end of the week.

At last day of the week, OCT 2019 closed at 59.05 with increase of 139 points.

At last day of the week, DEC 2019 closed at 58.83 with rise of 101 points.

At last day of the week, MAR 2020 closed at 59.44 with upward of 70 points.

Liverpool Index:

A was opened at 71.20 with same level from previous week’s closing figure.

• In this week Index “A” showed mix trend hence closed on negative side.
• At last day of the week, LPI “A” closed at 70.10 with decrease of 110 points as of opening figure of the week.

Crude Oil:

Crude Oil prices opened at USD 53.64 with lower level as compared to last week closing figures.

• In this week, crude oil price showed upward trend in this week, while dropped only in last session, hence closed on positive side at the end of week.
• In last day of the week, Crude Oil price closed at USD 55.10 with increase of USD 1.46 cents as of opening figure of week.

Pakistan Currency Exchange Rates

 In last week values of Pak rupee apricated 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 negative note with figure of 1.10 and British Pound also closed on negative note with figure 1.22 against USD.

Local Yarn:

• Local yarn market remained under sale pressure during this week ended and limited sales were finalized by buyers. Most of mills were interested to sell good quantity but buyer booked only urgent need yarn and was waiting for more correction in prices
• PSF price dropped by Rs.5/kg in domestic market dated 26^th Aug, 2019. Import fiber polyester dropped in international market which cause to drop local fiber prices. PTA, MEG price remains stable during this week, crude oil graph in International market also remained stable for this week. For next week it is also expected that price will drop more in local market.
• Faisalabad trading market remained close in term of sale and no yarn buying reported from mill in un registered sector. Some cash sale made without ID card copy but in very limited numbers.  Faisalabad based unites cut their production and trying to sell in register sector for some counts.

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

Export Yarn:

• Market remained under sluggish business activity. Customers remained aside of buying with limited numbers of enquiries. Order materialization was nominal against enquiries as customers are not able to take any decisions due to uncertain market conditions. On the other side, It is expected that prices will show pressure in days to come. We might see slight drop in prices as global recession is hitting all major markets.
• Although in Pakistan, cotton prices rose up but Usd is also depreciating. Despite of that, there is no improvement in prices and customers are still bidding 3-5% lower against offered prices. Some customers placed orders for limited brands where customers and suppliers come to conclusion.
• Korean customers remained silent and no enquiry was received. HK customers just floated few enquiries for price checking but no order was reported. Chinese customers remained in the market and kept of floating enquiries. Few deals were reported where suppliers matched customer required prices. However, it seems business activity will remain slow in days to come due to another session of regulatory duties from China and US on each other. European customers were on holidays and no activity has been witnessed.

Local Fabric:

• In current week under review the local fabric closed in red zone as negligible activity reported in the market for both narrow and wider width fabric markets.
• Weavers booked limited orders after tough negotiations at slightly reduced-price level by approximately 1% against reduced flow of inquiries.
• In narrow width weavers are booked till end September while wider width looms are covered till end October/early November’19 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 1.11 to 1.13 per yard, 16×12/108×56=63” in range of USD 1.20 to 1.22 per yard and 20×20/108×58=63” was sold in range of USD 0.93 to 0.95 per yard based on ex mills.

Export Fabric:

• Slow market sentiment was seen from Far Eastern markets during the week under review. Limited inquiries were received from Korea, China, Bangladesh and Vietnam resultant limited buying during the week.
• Prices were stable due to stable raw material prices. Good suppliers are booked till mid of Oct and offering end Oct onward deliveries. Average suppliers are offering early Oct onward deliveries. Suppliers are expecting slow business activity in coming days and market may start picking up after mid of Sep.

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

20×16/128×60=63”, in range of 1.09 to 1.11 per yd, 16×12/108×56=63” between USD 1.16 to 1.18 per yd and 20×20/108×5863” in range of USD 0.89 to 0.91 per yd based on CNF Far Eastern ports.

• Average kind of business activity was seen from European customers because most of the customers were still on their holidays. Some inquiries were received from Germany, Italy and Portugal whereas other parts of the Europe remained quite during the week.
• Wider width suppliers got good inquiries from Brazil, Italy, Germany and Portugal hence they have extended their sales till mid of Nov. USA buyers remained aside of buying during the week. Wider width suppliers are normally offering end Nov onward deliveries. Limited quantities are available with few suppliers for end Oct deliveries. Prices for wider width remain stable during the week.
• It is expected that European customers will start sending inquiries mainly for price checking before attending TexWorld and Premier Vision haled in France during mid of Sep.

Bedding & Towels:

• Home textile market remained firm last week. Customers floated goods number of inquiries in the market & maturity of business remained at satisfactory level. For both USA, Europe and the Australian market order maturity was very well received.
• Prices were almost stable and but did not decrease during the last week. Prices are to remain at the same level in the upcoming days.
• As far as shipments are concerned suppliers are offering 60 to 70 days for new orders & for repeat orders suppliers are offering 50 to 60 days.

Garments:

• Positive vibes prevailed in the garment industry of Pakistan as ongoing trade war discussion between China and USA apparently seem to have a healthy impact on Pakistan’s industry. Customers from Europe and USA are showing their interests to increase their garments procurement from Pakistan.
• With the increased technology in prints and designs factories are getting response from buyers to show them different options to select and place orders. Garment manufacturers here have financial muscles to build their capacities up to cater to the increased demand of customers.
• Mostly factories are booked till November and offering onward deliveries with reasonable price points.

Going Forward:

• In Local Yarn Market it is expected that yarn market will be remain soft, and under sale pressure and business will be according to count to count and brand to brand in market. Further bulk cotton arrival will determine the price for next season and price trends of yarn will be according to demand and supply of different counts which will lead price level.

• The Export Yarn Market remained under nominal business activity. Suppliers showed interest to sell but customers are booking limited quantities with desired prices levels only.

• In Local Fabric Market, though Europe will open in next week but we still foresee slow sentiments for next couple of weeks owing to looming recession in world commodity markets.

• In Export Fabric Market the Far Eastern side remained mixed with limited business activity. European customers have exchanged good inquiries in wider width fabric however most of the customers are still on their vacations.

• The Bedding & Towels market will remain firm and as per forecast the market is on the verge of improvement.

• With the advancement in technology Pakistan’s garment industry is ready to cater to the increased demand of customers from around the globe.