Market Report – Pakistan 14 Oct 2019

Local Cotton Highlights:

  • During last week, in local cotton market, moderate buying trend has been observed because of the shortage of fine quality lint, leading buyers were interested to buy as much as possible which has become short these days and has missed their production targets due to adverse weather conditions and poor resistance of seeds to withstand rains because of lack of R&D despite ambitious production targets set by the government. days. The use of inferior quality insecticides should be stopped as there is a need to focus on well researched fertilizers.
  • Untimely due to rains and extremely hot weather conditions it is expected that production of cotton will be 33 percent less as compared to last week’s production. It is estimated that in order to fulfill the needs of local textile mills 45 to 50 lac bales of worth 1.50 billion dollar will be imported which is a heavy burden on the economy. Until now local mills have signed import agreements of 20 lac bales. The numbers of import agreements are increasing day by day. Pakistan has imported one lac 33 thousand bales of cotton to date.
  • Due to the increase in buying by the spinning and textile mills and increase in the supply of Phutti the rate of Phutti and cotton remained stable. The trading volume was positive. The Karachi Cotton Association (KCA) spot rate increased Rs.50 and touched the level of 8750 per maund.
  • Prices of seed cotton (Kapas/Phutti) for the new crop (2019-2020) in Sindh were in range from Rs 3600 to Rs 4100 per 40 Kgs and new crop phutti is available from Sindh in range from Rs 7900 to Rs 9000 per maund (37.32 Kgs).
  • In Punjab prices of seed cotton was in range from Rs 3800 to Rs 4200 per 40 Kgs and new crop phutti is available from Punjab in range from Rs 8000 to Rs 9000 per maund (37.32 Kgs). In Balochistan, seed cotton prices were also higher at Rs 4100-4500.Overall deals were made between the range of USC 62~70 Lbs. (7,900~9,000/ maund).

New York Cotton Futures:

  • New York Cotton futures opened on higher levels on Monday as compare to previous week’s closing figures.
  • NYCF showed mix trend in this week, hence took a jump in last session and closed on higher side by the end of the week.

At last day of the week, DEC 2019 closed at 63.88 with increase of 205 points.

At last day of the week, MAR 2020 closed at 64.45 with rose of 188 points.

At last day of the week, MAY 2020 closed at 64.81 with upsurge of 138 points.

Closing of NYCF’s
Month Closing Change
Dec 19 63.88 cents / lb +2.05 cents/lb
Mar 20 64.45 cents / lb +1.88 cents/lb
May 20 64.81 cents / lb +1.38 cents/lb

 Liverpool Index:

A was opened at 72.25 with higher level from previous week’s closing figure.

  • In this week Index “A” showed mix trend in this week and closed on positive side.
  • At last day of the week, LPI “A” closed at 72.50 with increase of 25 points as of opening figure of the week.

Crude Oil:

Crude Oil prices opened at USD 52.75 with lower level as compared to last week closing figures.

  • In this week, crude oil price dropped in next three consecutive sessions, later increased in two sessions and closed on positive side at the end of week.
  • In last day of the week, Crude Oil price closed at USD 54.70 with increase of USD 1.95 cents as of opening figure of week.

Pakistan Currency Exchange Rates

  • In last week values of Pak rupee slightly 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 positive note with figure of 1.10 and British Pound also closed on positive note with figure 1.26 against USD.
Exchange Rates USD.
  Buying Selling
Inter Bank 155.12 155.17
Open Market 154.44 158.07

Local Yarn:

  • Local yarn market remained stable and firm in price of all counts. Prices remained firm due to local cotton prices were firm and was reporting short in quantity which caused for firm prices in all segments. On the other hand, weavers covered some extra yarn anticipating that in future prices maybe jump bit higher, so they took some position.
  • PSF prices remained stable during this week ended. In China PSF price were dropped and internationally crude oil prices also were in declining trend and same followed by raw material PTA and MEG. For next week it is expected that some correction in PSF expected in domestic market.
  • Faisalabad trading market reported limited business for un-register sector. Exporter and register mills were busy in day to day buying on these price levels. Most of looms running on blended yarn and cotton yarn activity remained average in market with reasonable demand and traders expecting some upward trend in near future.

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

Local Yarn Prices Range
Count Price US $/Bale
16/1 CD 420 to 435 per bale
20/1 CD 430 to 450 per bale
30/1 CD 490 to 515 per bale
20/1 CM 500 to 515 per bale
30/1 PC 52:48 410 to 445 per bale
40/1 CM 600 to 630 per bale
60/1 CM 895 to 935 per bale
80/1 CM 1195 to 1310 per bale

Export Yarn:

  • Market showed slightly improved activity in terms of enquiry. Order materialization was also better as compared to last week. Over all prices form suppliers remained firm and stable due to upward trend of cotton prices. Customers are also digesting prices and have increased their target prices to 1-2%. Hence, business was confirmed where customer matched their required price levels.
  • At the same time, there has been a positive development between trade talks of US-China which has given boost to cotton prices as China has agreed to buy agriculture products form US. So, it is expected that price will show upward trend in days to come. Korean customers remained slow and dull with numberless enquiries. HK customers kept on checking price for knitting yarns. However, orders are yet to be concluded. Chinese customers remained active in end of week after the news of US-China trade agreement which is moving market in positive direction. They have also confirmed orders higher than the last place orders by 2-3%.

Local Fabric:

  • The local fabric market remained slow and steady throughout the week for both narrow and wider width fabric markets. Weavers received limited inquiries for both widths and resultantly limited business materialization reported in the market whereas weavers raised their asking by 1% but orders confirmed at last week price level after tough negotiations.
  • Narrow width looms are booked till Mid November whereas wider width looms are booked till December’2019 and onward deliveries are available with all major suppliers. Dobby looms are booked till End February~March’2020 and weavers are not interested to book further quantities.

Local fabric prices of regular items are as follows:

20×16/128×60=63”at USD 1.12 to 1.14 per yard, 16×12/108×56=63” in range of USD 1.21 to 1.23 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:

  • This week remained active and there was a good flow of inquiries in the market. Although the buyers were negotiating the prices to make the deals on low prices but still some of suppliers have booked good volumes in Far East market.
  • Further, orders placement may become better if suppliers get good support on raw material prices but yarn prices are getting firm and it is creating problem for suppliers to catch bulk orders.
  • Major suppliers who have covered their maximum space don’t have early deliveries and only offering mid~end December shipments. However average level suppliers are offering end November-early December deliveries and they are trying to grab maximum quantity by offering good deliveries.

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

20×16/128×60=63”, in range of 1.08 to 1.10 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 0.88 to 0.90 per yd based on CNF Far Eastern ports.

  • Europe market remained slow in this week. There were limited inquiries in the market and only a few number of orders were placed. It is likely to say that business materialization was not recorded at a reasonable level because suppliers offering prices were not meeting customer’s expected level. Firm trend of yarn prices kept the suppliers hesitant to reduce the offered prices to meet buyer’s demands.
  • Wider width suppliers in comfortable zone because they have covered their capacities till end December to early January deliveries and offering end January onward shipments. Both wider and narrow dobby looms have same position because of limited number of looms and continuous demand of dobby articles.
  • USA market remained active in this week and Europe market is expected to pick the activity in coming days.

Bedding & Towels:

  • Home textile market remained firm in the last week. Good ratio of Floated Inquiries from European and other regions customers which they sent for new trends prices. USA Market, customers were floated good inquiries and they placed orders, the big orders still under discussion, order placement from USA market will be good.
  • European markets business placement is also good. Customers placed orders for Bedding and Towels keeping in view new season trends. Prices were almost stable and not observed any significant change in current prices.  keeping in view current market situation it looks that prices will be remain at current level and there will be no change in prices in upcoming weeks.
  • Although Suppliers have good orders in hand but due to vast Production capacities, they are still under sales pressure because supplier have 80% orders against their production facilities so to full fill their production capacities 100%, they are trying to get more orders from different customers / markets, even suppliers are offering very sharp prices to capture bulk orders. As far as shipments are concerned supplier is offering 60 to 70 days for new orders & for repeat orders supplier are offering 50 to 60 days.

Garments:

  • The Apparel Industry of Pakistan has invested a significant amount in developing not only the infrastructure but also the Human Resource that is needed to achieve sustainability. 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.
  • Pakistan is a strong source base for fleeces and heavy weight fabric garments. Better compliances and sustainable product and production options in factories and have been one major factor for getting interest of different buyers across the globe. Many of the factories have started their expansion programs as they are forecasting better volumes in future. Price points have been one for the main interest of the buyers. Factories have space to offer deliveries from January onward.

Going Forward:

  • About future market it is expected that yarn market will be remains firm and stable for next week, and price will be remains firm with minor difference and business will be according count to count and brand to brand in market. Further cotton arrival will determine the price of raw material for next season and price trends of yarn will be according to demand and supply of different counts which will lead price level.
  • It is expected that market will remain firm and stable with tendency to increase. We might see good order placements in days to come.
  • Overall market trends show better and business placement from different sectors is good and as per forecast market will be remain stable in coming days and customers will buying more.
  • Garment sector going through reasonable business developments which are attracting buyers to come in Pakistan and place orders.

Zawar Hakeem

View posts by Zawar Hakeem
I works as a Business Development Manager - International Markets at Vigour Impex. I am also tasked with handling digital marketing of Vigour Impex and transforming the company towards using online web based tools to enhance our daily sales and marketing operations which include prospecting, account management and promotions. I am also the lead moderator of our weekly market report along with other departmental heads who help compile the data before it gets published across our digital channels.
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