Market Report – Pakistan 16 Dec 2019

Local Cotton Highlights:

• During the last week, the local cotton market and the local textile industry has been involved in cautious buying where ginner’s interest was seen to be increased in the buying of cotton due to which the rate of cotton remained upwards. But the trading volume remained in the medium range.
• The prices of cotton remained stable overall. The Spot Rate Committee of Karachi Cotton Association has decreased the rate by Rs 50 per maund and closed it at Rs 8750.
• Mixed trend was seen in the prices of cotton in the international market. Fluctuation was seen in the rate of New York Cotton Market due to the trade conflict between America and China. Mixed trend was seen in the prices of cotton in Chinese market, while due to the crisis like situation in the Indian cotton market bearish trend continues.
• Prices of seed cotton (Kapas/Phutti) in Sindh were in range from Rs 3200 to Rs 4100 per 40 Kgs and cotton is available from Sindh in range from Rs 7800 to Rs 8900 per maund (37.32 Kgs). In Punjab prices of seed cotton was in range from Rs 3300 to Rs 4200 per 40 Kgs and cotton is available from Punjab in range from Rs 8000 to Rs 9000 per maund (37.32 Kgs). In Balochistan, seed cotton prices were in range of Rs 4200-4400.Overall deals were made between the range of USC 62~71 Lbs. (7800~9,000/ 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 mix trend in this week and at the end closed on positive side.

At last day of the week, MAR 2020 closed at 66.80 with increase of 142 points.

At last day of the week, MAY 2020 closed at 67.97 with rose of 157 points.

At last day of the week, JULY 2020 closed at 68.87 with upsurge of 170 points.

Liverpool Index:

A was opened at 73.90 with lower level from previous week’s closing figure.

• In this week Index “A” showed downward upward trend in this week and closed on positive side.
• At last day of the week, LPI “A” closed at 75.35 with increase of 145 points as of opening figure of the week.

Crude Oil:

Crude Oil prices opened at USD 59.02 with slight lower level as compared to last week closing figures.

• In this week, crude oil price showed upward trend and closed on positive side at the end of week.
• In last day of the week, Crude Oil price closed at USD 60.07 with increase of USD 1.05 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 1.11 and British Pound closed on positive note with figure 1.34 against USD.

Local Yarn:

• Local yarn market remained stable in term of asking prices and slow in term of business finalization. By end of this week, due to jump in NYCF, most of suppliers went firm in asking and increased their asking prices. Weavers tried to cover end of this week on last prices but very limited numbers were reported.
• PSF prices dropped Rs.2/kg by 7^th December 2019. In China PSF price was increased by end of this week and internationally crude oil prices were also had a stable trend and prices increased in raw material PTA and MEG by end of this week. For next week it is expected that price will remain stable for PSF in domestic market.
• Faisalabad trading market reported average business activity for un-register sector. Exporter and registered mills were also slow in their regular buying. Fine counts demand was there and reasonable activity was reported. Blended yarn demand reported very slow.

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

Export Yarn:

• Market showed improved business activity as customers remained active in the market and kept on booking orders with their selected suppliers. Overall price trend seemed stable with a slight increase. Suppliers remained active in the market to sell their Jan and Feb portions.
• It has been witnessed that customers have placed orders with increased prices of 1-2%. Major reason for such improved activity was positive development after long talks between US-CHINA trade deal in which USA has suspended further implementation of duties which were supposed to be implemented in December.
• This has given boost to cotton prices internationally which will put an impact on local cotton prices as well. We might see good business activity in days to come. Korean customers remained silent and no such business activity was witnessed. HK customers also remained slow and limited numbers of enquiries were floated against which order materialization was dull as well.
• Chinese customers were in the market and booked handsome quantities. It is expected that price will show betterment in days to come as well because demand is good and orders placements are done on regular basis.
• European customers floated limited numbers of enquiries. However, next week seems crucial as customer will place orders before going on holidays.

Local Fabric:

• The local fabric market closed with slow and steady sentiments for both narrow and wider width fabric markets. Weavers received limited inquiries from their buyers and negligible business reported in the market for both narrow & wider width fabric markets. Weavers kept their asking prices firm however against bids they are ready to negotiate by approximate 0.5% ~ 1% due to soft yarn prices.
• Narrow width looms are covered till mid-January ~ 3^rd week January’20 and wider width looms are booked till early February~Mid-February’20 whereas special looms are booked till 3^rd week February’20~End March and onward deliveries are available.

Local fabric prices of regular items are as follows:

Export Fabric:

• Few inquiries were received from China, Korea resultant decent quantity booking with airjet and Sulzer suppliers. Good business was conducted by Bangladesh and Japan customers. Indonesia, Vietnam and Thailand markets remained slow during the week. Suppliers offering prices were stable with soft tone just to get some business in absence of active demand from Far Eastern and Asian sectors.
• Good suppliers are booked till early Jan and offering mid Jan onward deliveries whereas average suppliers are offering end Jan deliveries. It is forecasted that business activity will remain mix during next couple of weeks.

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

• Comparatively slow demand was noticed from various European sectors. Limited number of inquiries were received from Germany, Italy, Portugal, Spain and Turkey. Asking prices for wider width remained quite better by using various origin raw material which made prices competitive however customers are taking long time for buying decision.
• Good inquiries from Portugal in organic cotton but prices were strangely higher by the suppliers due to limited organic cotton stock thus customers could not place those orders. Wider width suppliers are comfortably booked till end of Feb and offering March onward deliveries. USA market was slow during the week with limited inquiries both in narrow and wider width.
• Suppliers are expecting good demand in next week before Christmas holidays.

Bedding & Towels:

• Bedding & Towels market has remained slow in the last week and limited orders were placed.
• USA Market saw limited inquiries being floated in the market and customers placed limited orders of running Collections. European buying has also been slow.
• Prices were almost stable and no significant change has been observed. If prices remain stable than customers will place the new orders within the 1^st quarter of 2020.
• 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’s garment industry is adequately equipped to produce latest fashions to suit tastes and needs in any part of the world. Leading Pakistani designers, apparel manufacturers and exporters regularly display their designs and products round the globe at international fairs and exhibitions and in trade centers.
• With the consistent performance in yester years, 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.
• Dialogues for the next the year’s bookings haven’t been started so aggressively as teams have been engaged on Christmas and new year holidays.
• Factories have space to offer deliveries from March onward.

Going Forward:

• The Local Yarn the market is expected to remain stable for the next week due to firm prices of raw material. Further price trends will be according to demand and supply of different counts which will lead price level.
• The Export Yarn Market showed good business activity for another week in a row. Customers are booking orders on regular basis and have increased their target prices as well. So, it is expected business activity will remain good in days to come.
• In Local Fabric Market slow sentiments may prevail for both narrow and wider width looms for coming weeks.
• In Export Fabric Market, Fareastern and Asian customers have placed decent quantity during the week as improved demand was noticed. The prices were stable with soft tone. Limited buying was witnessed by the European customers however organic cotton orders were not materialized due to an increase in prices. Good quantity of orders is expected to be placed next week before the Christmas holidays.
• In the Bedding & Towels market the overall business activity remained slow and business placement from various regions has been limited but current market statics has prices shown to be stable and keeping in view current situation, prices will be slightly on upside, so it seem looks that Customer will decide to place orders in coming weeks. It is suggested, it would be better for customers to place new orders in the next week to get the competitive prices for future requirements.
• With the increasing confidence of global buyers over a period of time, Pakistani Apparel manufacturers will be a better choice for them in future.