PAKISTAN COTTON MARKET:
In the local cotton market during last week, business activities remain suspended due to lockdown because of coronavirus. There was almost no business in the local cotton market for the last one and a half months.
As there was no business, during the last four weeks the spot rate is stabled at Rs 8800 per maund. The Spot Rate Committee of KCA is issuing the spot rates regularly because on the basis of these rates banks issued loans to the mills and the ginners as well as reporting the rates at international level.
The sowing of cotton is successfully going on. Cotton production is expected to increase. The new crop of cotton is expected to start arriving partially from the month of June in Sindh.
Textile and spinning mills are busy in receiving deliveries of imported cotton from abroad while ginners were looking for buyers as there was no business in the market. Ginners were facing loss from both sides; on one side the rate of interest of banks were increasing and on the other hand due to the increasing dryness the cotton is losing its worth.
Bullish trend was witnessed in international cotton market. The rate in New York Cotton Market started increasing after the news regarding China will start buying. After the increase of four cents per pound the New York cotton reached at 57 American cents but closed at 54.36 American cents after the weekly export report of USDA which shows that exports decreased by 15 percent as compared to last week. The increase in cotton prices was witnessed after the normalization of business activities in China.
In India the rate of cotton increased by Rs 300 to Rs 400 per Candy. Its expected that consumption of cotton in India may fall by 25-30 lac bales in the current year following the coronavirus out break and the subsequent nationwide lock down.
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 8700 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 8800 per maund (37.32 Kgs). Overall prices were in the range of USC 60~66 Lbs. (8000~8,800/ maund.
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 59.00 | 59.00 | 0.00 |
| Highest | 64.00 | 64.00 | 0.00 |
CRUDE OIL:
Crude Oil prices opened at USD -37.63 with lower level as compared to last week closing figures.
In this week, crude oil price recovered his lowest level and closed on positive side at the end of week.
In last day of the week, Crude Oil price closed at USD 16.94 with increase of USD 54.57 cents as of opening figure of week.
| Lowest | Highest | Change | |
| Price | -37.63 | 16.94 | -54.57 |
EXCHANGE RATE:
In last week values of Pak rupee depreciated 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 1.09 and British Pound also closed on negative note with figure 1.24 against USD.
| Selling | Buying | |
| LC Sight | 159.87 | 159.82 |
| LC 120 Days | 158.48 | 158.43 |
| Open Market | 162.31 | 158.60 |
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 closed on positive side by the end of week.
At last day of the week, MAY 2020 closed at 54.93 with increase of 90 point.
At last day of the week, JULY 2020 closed at 55.63 with rose of 161 points.
At last day of the week, OCT 2020 closed at 57.35 with surge up of 132 point.
PAKISTAN YARN MARKET:
Local yarn market was partially opened after lockdown due to COVID-19. Most of the mills started production based on in-house weaving and some export towards China and Fareast markets. Major industry is yet closed due to carrying stock and having funds issues. On the other hand, weavers have started their operation and trying to consume stocks and managing finished product export orders after reduction in quantity or cancelation from end customers.
PSF prices remained stable during this week ended. PTA, MEG prices were decreased after big decline of oil prices in international market and same followed by polyester fiber. Due to big decline in oil prices, PSF prices expected to drop in domestic market but yet IFL plant is also close.
Faisalabad trading market was closed.
Following are current asking prices of yarn in local market based on ex mills:
| Count | Price US$/Bale |
| 16/1 CD | 400 – 410 |
| 20/1 CD | 410 – 425 |
| 30/1 CD | 475 – 485 |
| 20/1 CM | 475 – 480 |
| 30/1 PC 52:48 | 380 – 390 |
| 40/1 CM | 595 – 605 |
| 60/1 CM | 860 – 885 |
| 80/1 CM | 1135 – 1225 |
EXPORT YARN MARKET:
Market remained dull and slow with countless business activity from all region due to Corona Virus.
Limited enquiries were floated against which order materialization was minimal.
Effect on economies due to Pandemic is rising on daily basis and we might see another recession for the months to come.
Demand is shrinking worldwide as all brands are closed. moreover, these brands are carrying heavy inventories with them and seems not interested to place any further order in days to come.
On the other hand, suppliers who started their factories 2 weeks back on hope that china may support them as they are out of this Pandemic somehow. However, over supply from china put them under drastic situation and all the factories have got surplus yarns stocks. At the same time, many of the finishing companies still not started the operations due to cancellation of their orders from Eu, USA.
Under the current scenario, business transactions are on halt and very limited activity is witnessed.
China is better in terms of Virus but due to disturbance of business all over the world, Chinese are also facing heavy cancellations of orders. This might put them in another turmoil as they are unable to rub factories due to which yarns shipments are also on hold.
Situation is moving towards critical point as worldwide economy is collapsed.
| Count | Korea | HongKong | Taiwan | Japan |
| 16/1 CD | 405 – 415 | 405 – 415 | 405 – 415 | 405 – 415 |
| 20/1 CD | 415 – 425 | 415 – 425 | 415 – 425 | 415 – 425 |
| 20/1 CM | 470 – 480 | 470 – 480 | 470 – 480 | 470 – 480 |
| 30/1 CD | – | – | – | – |
| 32/1 CD HOS UNWAXED 100% COT. | – | – | – | – |
| 30/1 CM | 525 – 535 | 525 – 535 | 525 – 535 | 525 – 535 |
| 32/1 CM | 535 – 545 | 535 – 545 | 535 – 545 | 533 – 545 |
| 24/2 CD | 510 – 520 | 510 – 520 | 510 – 520 | – |
PAKISTAN FABRIC MARKET:
The local fabric market reported minute activity and buyers were searching for ready stocks especially in narrow width throughout the week.
Still offices partially opened to enforce government instructions regarding corona virus pandemic. Overall negligible business reported in the local fabric market. Weavers and spinners are facing liquidity crunch and facing difficulties to restart their operations.
Fabric prices eased down by almost 1% in the absence of confirm orders.
Weavers are booked in narrow width loom till Mid May~3rd week May’2020 and also covered their wider width looms till end May ~ early June’2020 but due to current scenario they are feeling pressure and searching for local orders to run their looms against any confirm order.
Local fabric prices of regular items are as follows.
| Construction | Price US$/YD ExMill |
| 20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN | 0.97 – 0.99 |
| 16X12/108X56 63″ 3/1 | 1.08 – 1.09 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 0.81 – 0.83 |
EXPORT FABRIC MARKET:
Some of the Far Eastern markets are very active and customers are buying good quantities from their selected suppliers.
Suppliers have received good order quantities from Korea, China and Japan. Other markets like Bangladesh, Vietnam, Thailand and Indonesia are quite without any booking.
Fabric prices reduced about 4~6% from the last orders due to less demand.
Suppliers have started their weaving operations partially according to their orders mainly for export markets.
Since most of the customers were holding their ready shipments, suppliers are facing difficulty to keep inventory / stocks which are affecting their cash flows.
Currently good suppliers are booked till end of May whereas average suppliers are booked till mid of May and offering onward deliveries.
Due to Covid-19, European and USA markets are almost closed. Suppliers have received inquiries only from Germany mainly for health care / hospital related items.
No considerable booking was noticed for wider width fabric. Most of the customers have already held their shipments with their suppliers hence they are keeping the ready goods in stocks.
According to the booking, supplier have covered their sales till end of June and offering July onward deliveries because they are not running their units in full capacity.
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 | 1.01 – 1.03 |
| 16X12/108X56 63″ 3/1 | 1.10 – 1.12 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 0.84 – 0.86 |
BED LINEN & TOWELS:
Bedding & Towels market has experienced immense amount of order cancellations and hold ups during the lockdown period but now that it has opened again, the factories are in the process of kick starting their process.
The government has only allowed the opening of those factories that are taking proper sanitization measures and following set SOPs of city district administrations.
The factories however are only manufacturing orders with limited labor for now in order to maintain social distancing norms, however many processing plants haven’t been able to properly start due to not having enough runs for the machines to kick in although the institutional bedding manufacturers are exporting in full swing.
GARMENTS:
Pakistan’s textile exports had dipped by 4.46 percent in March due to global slowdown owing to the coronavirus pandemic. The country’s textile exports stood at US $1.039 billion in March 2020 as compared to $1.088 billion in same month of previous year. Exports of knitwear had enhanced by 6.74 percent during the nine months of the current fiscal year over a year ago. Meanwhile, exports of ready-made garments had also surged by 10.98 percent last financial year.
With the increases surge of corona cases in Pakistan, it is getting difficult to run the wheel of economy. At the same time garment factories are trying their best to start working under strict compliance of SOPs approved by the government officials. Some of factories have already started their manufacturing units in Faisalabad and Multan area. Whereas Lahore and Karachi area factories are expecting approvals during the current week to start their operations.
US retail sales saw their biggest drop during March with clothing stores seeing the largest decline as consumers prioritized spending on essential goods such as groceries and health products. Few orders of face masks have been placed in Pakistan from US market and factories are working on that. In UK market, extended lock down might push the fashion spend by USD 1.7Bn.
GOING FORWARD:
The local cotton market activity remain suspended due to lockdown situation. The spot rate stabled at Rs. 8,800 per maund because of no business. It is expected that cotton consumption in India may fall by 25~30 lac bales due to closed down of the industries.
Local yarn market will be more clear once all industry is open. Correction in prices is expected in coming days.
Local fabric market expected to remain soft for both narrow and wider width looms for coming weeks.
Export yarn activity remained dull and slow during the week. Due to closed down of all brands in worldwide, the demand is very less. The situation is moving towards critical point as worldwide economy is collapsed.
Export fabric market activity is expected to remain limited for coming days until the lock down situation get better around the globe. Prices may remain same or with little bit soft tone due to less demand. However it is important to place orders with reliable and financially strong suppliers.
Currently with global retailers closed for now, the bedding industry has resorted towards exporting instructional articles for medical industry. Coming weeks will tell how the market will swing forward.
The Covid-19 pandemic will provide the global fashion industry with an opportunity to “reset and reshape”, with digital acceleration, discounting, consolidation and innovation all expected in coming time.
