Pakistan Cotton Market:
In the local cotton market, trade activity couldn’t improve as only needy buyers showed interest in buying. Despite of lowest production of cotton this year and withdrawal of import duty on cotton, it seems that leading buyers are relaying on import of cotton.
Government has announced to abolish 5% sales tax on import of cotton, 3 % regulatory duty and 2 % custom duty and over all announced to abolish 11% import duty from January 15 to June 30.
In the local cotton market during the last week the prices of quality cotton increased around 100~200 Rs per maund. The Spot Rate was remained same and firm at the level of Rs 8900.
It is expected that intensity of America and China trade conflict will be decreased partially from January 15. There is an increasing trend in the rate of New York Cotton. On the other hand, America has killed Iranian commander despite USDA’s weekly export report which shows 82 percent increase as compared to last week which has once again led the world economy in trouble. The rate of cotton remained stable in China while in India the downward trend in prices of cotton remained continued.
As per PCGA report, till last week 81 lac twenty thousand bales were produced which is 21 lac thirty four thousand bales less about 20.77 percent less as compared to last year production of one crore three lac bales. According to the experts this year 87 lac bales will be produced in the country. Local mills will have to import 60 lac bales in order to fulfill the demand of One crore 50 lac bales. Uptill now agreements for the import of 42 lac bales from abroad have signed and new agreements were signed daily. This year cotton will be imported in record number and government has to spend a foreign exchange of around more than USD 1.75 billion.
It seems that activity will remain moderate in a day to come and no major changes are expected in term of prices.
Prices of seed cotton (Kapas/Phutti) in Sindh were in range from Rs 3200 to Rs 4300 per 40 Kgs and cotton is available from Sindh in range from Rs 8000 to Rs 8900 per maund (37.32 Kgs). In Punjab prices of seed cotton was in range from Rs 3300 to Rs 4400 per 40 Kgs and cotton is available from Punjab in range from Rs 8000 to Rs 9200 per maund (37.32 Kgs). Overall deals were made between the range of USC 63~71 Lbs. (8000~9,200/ maund).
Crude Oil
Crude Oil prices opened at USD 61.68 with slightly lower level as compared to last week closing figures.
In this week, crude oil price showed downward trend, while took jump up on closing and closed on positive side at the end of week.
In last day of the week, Crude Oil price closed at USD 63.05 with increase of USD 1.37 cents as of opening figure of week.
| Lowest | Highest | Change | |
| Price | 61.68 | 61.18 | -0.50 |
Exchange Rate
In last week values of Pak rupee remained stable 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 1.12 and British Pound also closed on negative note with figure 1.31 against USD.
| Selling | Buying | |
| LC Sight | 154.03 | 153.98 |
| LC 120 Days | 147.85 | 147.80 |
| Open Market | 156.90 | 153.30 |
New York Cotton Future
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 and at the end closed on negative side.
At last day of the week, MAR 2020 closed at 69.20 with decrease of 36 points.
At last day of the week, MAY 2020 closed at 70.38 with drop of 37 points.
At last day of the week, JULY 2020 closed at 71.27 with downward of 26 points.
Pakistan Yarn Market
Local yarn market improved in term of asking prices during this week ended. Prices in asking was firmed and increased Rs.2~4/lbs due to positive reports about trade talk between USA and China, which impact good activity for export yarn toward china. Suppliers were comfort in their sales and was not have stock pressures. On the other hand, weavers were interested on last week rates buying but limited deals they booked.
PSF prices remained stable during this week. In China PSF price were stable and internationally crude oil prices also were in smooth trend and same followed by raw material PTA and MEG. For next week it is expected that PSF prices expected stable in domestic market.
Faisalabad trading market reported average business activity. Some fine counts trade was made during this week ended. Exporter and register mills were also busy in their regular buying. Fine counts demand was there and reasonable activity was reported. Blended yarn business reported average in term of business finalization.
Following are current asking prices of yarn in local market based on ex mills:
| Count | Price US$/Bale |
| 16/1 CD | 430.00 – 450.00 |
| 20/1 CD | 450.00 – 475.00 |
| 30/1 CD | 510.00 – 530.00 |
| 20/1 CM | 515.00 – 530.00 |
| 30/1 PC 52:48 | 410.00 – 445.00 |
| 40/1 CM | 625.00 – 660.00 |
| 60/1 CM | 915.00 – 950.00 |
| 80/1 CM | 1205.00 – 1315.00 |
Export Yarn Market
Market remained firm and stable with good business activity. Customers kept on buying good quantities.
Cotton prices were firm in this week. Although sentiment was on firm side due to decrease tension of USA & China. If we look at the market sentiment, it is most expected that prices will remain firm and stable with handsome business activity.
Suppliers are quite comfortable with their sales position and asking for higher prices in accordance of cotton prices. We might see good business activity in days to come as well.
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 showed good business activity as they kept on buying their selected brands. Over all, prices has showed increase of 3-4% in last one month.
European customers remained on Christmas holidays and no such activity was witnessed.
Following were the closing rates based on CNF Far Eastern ports:
| Count | Korea | HongKong | Taiwan | Japan |
| 16/1 CD | 450 – 460 | 460 – 460 | 450 – 460 | 450 – 460 |
| 20/1 CD | 460 – 470 | 470 – 470 | 460 – 470 | 460 – 470 |
| 20/1 CM | 515 – 525 | 525 – 525 | 515 – 525 | 515 – 525 |
| 30/1 CD | 520 – 530 | 530 – 530 | 520 – 530 | 520 – 530 |
| 32/1 CD HOS UNWAXED 100% COT. | 520 – 530 | 530 – 530 | 520 – 530 | 520 – 530 |
| 30/1 CM | 570 – 580 | 580 – 580 | 570 – 580 | 570 – 580 |
| 32/1 CM | 565 – 575 | 575 – 575 | 565 – 575 | 565 – 575 |
Pakistan Fabric Market
| In current week under review the local fabric market remained slow but firm for both narrow and wider width fabric markets.
Suppliers increased their asking by approx 1~2% against limited inquiries received from their buyers but orders booked at last week price level as customers were not accepting increase in prices. Major weavers are booked in narrow width till mid ~ end Feb whereas wider width looms are covered till end-March’2020 and offering onward deliveries. Following were the closing rates for some of the regular items based on Ex-Mill: |
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Export Fabric Market
Due to new year holidays, the customers from Far East and Asia share just limited inquiries resultant no considerable buying during the week.
Asking prices by the suppliers were firm due to firmness rather upward yarn prices.
Good suppliers are booked end of Feb and offering early March onward deliveries whereas average suppliers are offering end Feb onward deliveries.
Suppliers are expecting that prices may remain firm with upward trend in coming days and business activity will pick up.
Limited inquiries were received from Italy, Spain, Germany and Portugal because most of the customers are on New Year holidays.
Wider width suppliers also could not get more orders due to holidays.
Currently wider width suppliers are comfortably booked till end of March and offering April onward deliveries.
USA customers were also not active due to holidays.
Suppliers are expecting good business activity during upcoming Heimtex fair next week.
Following were the closing rates based on CNF Far Eastern ports:
| Construction | Price US$/YD CNF Far East |
| 20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN | 1.13 – 1.15 |
| 16X12/108X56 63″ 3/1 | 1.22 – 1.24 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 0.94 – 0.96 |
Bed Linen & Towels
Home textile for USA market was slow during the week. Customers floated limited inquiries and thus placed limited orders.
Limited activity was observed from European markets as limited orders were booked for urgent deliveries to continue the goods supply chain. As per forecast; market will remain slow till the mid-January due to upcoming Heimtex fair 2020.
Prices were almost stable and not observed any significant change in price levels. Supplier are offering attractive prices to get more business. keeping in view current market situation; it looks that prices will remain stable in upcoming days which will lead into business finalizations during the Heimtex fair.
Suppliers have orders up to February, 2020 and struggling for March onward orders to engage their capacities.
Suppliers are offering 80 to 90 days lead time for new orders & for repeat orders; supplier are offering 6o to 65 days.
Garments
Holiday mood persisted in recent past as customers started coming back from New Year and Christmas Holidays. Pakistan has witnessed an evolution in Garment industry as we have observed that industrialists who were initially engaged in spinning or weaving have ventured into Finished Garment Production as they have realized that profitability builds up with each process.
An increase in new customers have been seen from Europe and United States. The Garment industry is accepting a tremendous growth in their business as they have proven to the Global customers that challenges of timely delivery and quality products can be met from and sustained in Pakistan.
Factories are running at their full capacities for the orders already in hand. Lead time is being offered from eighty to ninety days depending upon the type of the garments.
Going Forward
In the Local cotton, Government has announced to abolish 5% sales tax on import of cotton, 3 % regulatory duty and 2 % custom duty and over all announced to abolish 11% import duty from January 15 to June 30.
The prices of quality cotton increased around 100~200 Rs per maund. The Spot Rate was remained same and firm at the level of Rs 8900.
Local yarn market is expected to remains stable and firm for next week due to good sale position of mills. Further price trends will be according to demand and supply of different counts which will lead price level.
Market showed good sentiment and prices are expected to increase further. So, we might see good business activity in days to come.
Local fabric market may show slow & steady trend for both narrow and wider width looms for coming weeks.
Less inquiries were report during the week from Far east and Asian markets due to holidays. Prices were firm with upward trend and expecting to remain firm in coming days.
European customers have share limited inquiries as most of the customers were on holidays. USA buyers remained aside of buying however it is expected good activity from next week onward.
Overall Business activities were slow but current market Statics showing business will grow in upcoming weeks and customers will place their major orders during or after the Heimtex fair.
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. The factories are running at full capacities due to good orders in hand.
