Market Report – Pakistan 27 Jan 2020

Local Cotton Highlights:

• In the local cotton market, cautious buying was seen by the textile mills as a result of which trading volume decreases. Leading buyers were away from the fresh buying and focusing of their import of cotton. Only needy buyers took interest in routing buying only.
• In the local cotton market during the last week the prices were increased of fine quality lint from 100~~200 rs per maund. Ginners were quite firm in expectations of further rise in prices in coming days due to the shortage of the fine cotton. So, they were reluctant to sale on these levels. The Spot Rate also increased rs.100 and touched the level of 9100 in this week.
• After the instability in the international cotton markets there was a downward trend. The first phase of the economic dispute between China and US has been signed however currently; China has not signed any new cotton deals due to which there is uncertainty in the market. According to the weekly export report of USDA as compared to last week exports increased by 32 percent but the market took no notice.
• On the other hand due to Lunar holidays in China from January 24 to February 2 delayed the purchase. In China the business remains suspended for seven days due to holidays. Due to severe outbreak of Corona virus in China, slow down was witnessed in the markets around the world.
• Cotton prices in India are steadily declining however CCI was involved in massive buying in order to bring stabilization in the rate. The target of buying is 5 million but up till now only 3 million bales have been purchased.
• 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 9400 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 9400 per maund (37.32 Kgs). Overall deals were made between the range of USC 63~74 Lbs. (8000~9,400/ maund).

New York Cotton Futures:

• New York Cotton futures opened on lower levels on Monday as compare to previous week’s closing figures.
• NYCF took jump in subsequent day, later showed downward trend till closing, hence closed on negative side by the end of week.

At last day of the week, MAR 2020 closed at 69.40 with increase of 16 points.

At last day of the week, MAY 2020 closed at 70.20 with drop of 12 points.

At last day of the week, JULY 2020 closed at 71.12 with downward of 15 points.

Liverpool Index:

A was opened at 79.20 with same level from previous week’s closing figure.

• In this week Index “A” showed mix trend to firm and closed on higher level opening level.
• At last day of the week, LPI “A” closed at 80.20 with the increase of 100 points.

Crude Oil:

Crude Oil prices opened at USD 58.34 with lower level as compared to last week closing figures.

• In this week, crude oil price showed downward trend and closed on negative side at the end of week.
• In last day of the week, Crude Oil price closed at USD 54.19 with decrease of USD 4.15 cents as of opening figure of week.

Pakistan Currency Exchange Rates

• In last week values of Pak rupee showed slight fluctuation on both side 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 closed on positive note with figure 1.31 against USD.

Local Yarn:

• Local yarn market was stable in term of asking and average business was finalized during this week ended. Most of mills were interested to sell yarn on these prices but limited sale was made as buyer was waiting for some correction. Fine counts were still an option in import and customer booked required quantity there. On the other hand, suppliers were sold for 20~25days and offering onward deliveries.
• PSF prices remained stable during this week ended. 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 remained active in fine cotton yarn counts and slow in blended yarn. Viscose looms will start in end Feb which will correct cotton yarn prices and demand will be shifted. Unregister sale was made in limited numbers and mills were still trying to find some register sector.

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

Export Yarn:

• Market remained slow with dull business activity due to holidays in Far east and China.
• Customers were on side line and no such activity was witnessed.
• Suppliers have sold handsome quantities in last couple of weeks due to which they remained firm and stable.
• It has been witnessed that due to Corona Virus in China and other neighbor countries, situation is getting worse which is also putting impact on business activities.
• It may take some time that situation get streamlined.
• Chinese customers are on holidays and it is expected that if situation is handled, then customer might prolong the holidays which will be a setback for all the business community.
• Cotton prices showed stability throughout the week.
• 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 ot cotton prices.
• Korean customers remained silent and no such business activity was witnessed.
• HK customers also remained silent due to holidays.
• Chinese customers were inactive and not discussing any business during holidays.
• European customers floated good numbers of enquiries for yarn buying against orders they placed during Heimtex. It is expected that good demand will arise form market in anticipation of further incline in prices amid good demand.

Local Fabric:

• The local fabric showed modest gains in their asking prices for both narrow and wider width fabric markets.
• Weavers increased their inflows and raised their asking prices owing to comfortable level of booking for both narrow and wider width fabrics therefore limited business materialization reported in the market against slowed market sentiments.
• In narrow width major weavers are booked till mid-March’2020 and wider width looms are covered till end March/early April’2020 and onward deliveries are available respectively.

Local fabric prices of regular items are as follows:

Export Fabric:

Export fabric far eastern market remained slow during the week under review. Korean cusotmers have exchanged limited inquiries for price checking as no orders placment was noticed. Chinese customers were preparing for coming holidyas hence no considerable inquiries were reported. Limited inquiries were received from Japan, Bangladesh, Vietnam and Thailand resultant limited buying with selected suppliers. Asking prices were stable with firm note by the suppliers due to firmness of raw material prices. Currently good suppliers are booked till mid of March and offering end March onward deliveries whereas average suppliers are booked till end of Feb and offering early ~ mid March onward deliveries. It is expected that Far Eastern markets will remain mixed in coming days with limited buying.

Average business activity was reported from European and American markets. Good number of inquiries were received from most part of the Europe, Africa and USA resultant decent quantity booking both in narrow and wider width at increase price level.

Wider width suppliers were keeping their prices firm due to increase of raw material prices. They are comfortably booked till March ~ April. Most of the suppliers are offering even May deliveries. Limited suppliers have space for April deliveries. Customers were unable to get their desired deliveries however they booked orders as they have no option for better deliveries.

Suppliers are expecting good business activity from the globe in coming days and prices may remain stable.

Conclusion : Fareaster markets remained slow. USA and European markets were active as good buying was noticed both in narrow and wider width. Prices remained stable and firm. It is expected that business activity will improve in coming days. Following are the prices based on CNF Far Eastern ports

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

Bedding & Towels:

• Home textile market was active in last week and good business activity seen in the market.
• USA Market was active in last week, good inquiries floated in market & business placement was good.
• European markets buying also improved. Customers sent the new inquires for the future orders keeping in view their future requirements. Few customers placed good orders. As per current market situation it looks market further improved in upcoming weeks.
• Prices were almost stable. Although yarn prices have been increased but not observed any significant change in current price levels. Suppliers trying their best to keeps the prices competitive to capture the business.  Current market statistics shows that prices can be slightly increased if yarn prices will not stable in upcoming weeks.
• Suppliers have orders up to March, 2020 but still they trying to get more orders to fulfill their capacities 100% after March. they are trying get more orders from different customers / markets, offering good prices after reducing their margins to capture orders.
• As far as shipments are concerned supplier is offering 80 to 90 days for new orders & for repeat orders supplier are offering 50 to 65 days.

Garments:

• Pakistan’s apparel industry is observing an evolution as it was observed that some of the garments unit have started working on increasing their production capacities along with functional capabilities.
• Most of the cut to pack units are also planning to get their in-house dyeing facility for effective control and better results.
• Customers have come back from Christmas and new year holidays and Spring Summer 2020 placements have started. Pakistan’s garment industry is accepting a tremendous growth as customers are showing their interest in different designs techniques and styles of garments as factories have catered well to their demands previously.
• At the moment factories have space to offer deliveries from eighty to ninety days and above as per garments designs and available capacities with factories.

Going Forward:

• About future market it is expected that domestic yarn market will be stable in blended yarn and some correction may expected in cotton yarn counts. Further price trends will be according to demand and supply of different counts which will lead price level.
• Market remained under mixed trading activity due to holidays in major parts of the yarns buyers’ countries. We might see another week in row for slow business activity due to holidays. Prices are expected to remained firm and stable.
• In line to our last week review we expect firm and steady trend for both narrow and wider width looms for coming weeks.
• Overall Business activities were observed good and business placement from different sectors improved and customer placed the good orders.  As per forecast market will remain stable and Customer will place orders in coming weeks.
• Pakistan’s apparel industry is expecting sizeable placements from customers which will keep filling factories capacities for smooth deliveries.