PAKISTAN COTTON MARKET:
In the local cotton market, dullness prevailed, textile and spinning mills were remained on sidelines. So overall cotton business volume witnessed continuous decline. Production of cotton decreased 20.26 percent. Import agreements of 50 lac cotton bales from abroad were signed. Due to the availability of good quality cotton from abroad in lower rates millers had stopped buying from local ginners. Up till now ginners had limited stock of 5 lac bales out of which we can say that only 25 percent cotton is of good and middle level quality.
In the local cotton market, the prices of cotton remained stable. The Spot Rate was remained stable at the level of 9000 in this week, due to the slow business activity prices didn’t show any changes.
Few days back due to the news of Corona virus in the world abnormal declines were observed in all markets due to which Rate of New York cotton after decreasing by 8 American cents reached at the lowest level of 61.50 American cents to 62 American cents. By talking the advantage of lower rates some mills had signed import agreements on lower rates.
According to the export report of New York Cotton, Turkey bought 87,400 bales, Pakistan 62,300 bales and China bought 58400 bales. Thus, China again started importing American cotton; which will be helpful in increasing the rate of New York Cotton. On the other hand, uncertainty prevails in Chinese market while a little bit improvement was witnessed in Indian market after a heavy fall.
In the lower areas of Sindh the sowing of cotton has started but the farmers of these areas are giving preference to grow pepper due to the non-availability of good quality cotton seeds. The other reasons are that they got good price of pepper. Due to the low quality of seeds it looks difficult that cotton production target will be achieved. On the other hand it is expected that due to the low quality seeds it is feared that germination of seed will be half as compared to traditional production. Generally, germination was 70 to 80 percent but it is expected that it will be around 40 percent to 50 percent.
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 9000 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 9000 per maund (37.32 Kgs). Overall deals were made between the range of USC 63~71 Lbs. (8000~9,000/ maund).
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 64.00 | 64.00 | 0.00 |
| Highest | 71.00 | 71.00 | 0.00 |
CRUDE OIL:
Crude Oil prices opened at USD 46.75 with higher level as compared to last week closing figures.
In this week, crude oil price rose in next session later 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 41.28 with decrease of USD 5.47 cents as of opening figure of week.
| Lowest | Highest | Change | |
| Price | 46.75 | 41.28 | 5.47 |
EXCHANGE RATE:
In last week values of Pak rupee showed slight improvement 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 1.14 and British Pound also closed on positive note with figure 1.31 against USD.
| Selling | Buying | |
| LC Sight | 153.44 | 153.39 |
| LC 120 Days | 147.72 | 147.67 |
| Open Market | 156.30 | 152.66 |
NEW YORK COTTON FUTURE:
New York Cotton futures opened on higher levels on Monday as compare to previous week’s closing figures.
NYCF showed downward mix trend in this week, while closed on negative side by the end of week.
At last day of the week, MAY 2020 closed at 62.79 with drop of 59 points.
At last day of the week, JULY 2020 closed at 63.51 with downward of 55 points.
At last day of the week, OCT 2020 closed at 64.01 with decline of 01 point.
PAKISTAN YARN MARKET:
Local yarn market remained under sale pressure and limited sale was reported. Most of suppliers were interested to sell yarn but limited numbers were booked. Mill were trying to sustain in prices but due to limited enquiry only small quantity was booked.
PSF prices remained stable during this week ended. PTA, MEG prices were decreased after adjustment of oil prices after dip in international market and same followed by polyester fiber. For next week it is expected that price will decrease Rs,3~4/kg in domestic market.
Faisalabad trading market was reported average business activity. Most of traders were busy in their viscose yarn buying as next season started. Fine counts demand was average and blended yarn also was in limited demand.
Following are current asking prices of yarn in local market based on ex mills:
| Count | Price US$/Bale |
| 16/1 CD | 425 – 440 |
| 20/1 CD | 445 – 470 |
| 30/1 CD | 510 – 525 |
| 20/1 CM | 520 – 530 |
| 30/1 PC 52:48 | 405 – 435 |
| 40/1 CM | 645 – 665 |
| 60/1 CM | 935 – 960 |
| 80/1 CM | 1220 – 1315 |
EXPORT YARN MARKET:
Market showed improved activity as compared to last couple of weeks. Although Stock markets recovered but signs of business are still dull due to over all stressed sentiment in the market.
If we talk about sales position of suppliers, they are comfortable booked till mid-April and at the same time, the good news is that L/C’s of pending orders also started to open partially.
Mainly pressure is on coarse count suppliers who are based on Chinese market as unfortunately Chinese customers are still working partially due to Corona Virus. However, they have started the working and all suppliers also keep receiving L/Cs for existing orders.
At the same time, some new orders were also placed which is a sign of relief for suppliers.
All major suppliers in Pakistan are carrying cotton of at least 6 month which is incurring them huge cost. So, if market kept on declining, they will face heavy losses.
European customers remained under nominal business activity and kept on floating limited numbers of enquiries. However, order materialization remained minimal and few deals were closed where customers matched their target prices.
Cotton prices in domestic and international markets remained weak with bearish tone.
So, we might not see big movement in prices and it is expected that prices will remained firm and stable.
Korean customers remained silent as no such business activity was witnessed.
HK customers also remained silent due to holidays.
| Count | Korea | Hong Kong | Taiwan | Japan |
| 16/1 CD | 435 – 445 | 435 – 445 | 435 – 445 | 435 – 445 |
| 20/1 CD | 445 – 455 | 445 – 455 | 445 – 455 | 445 – 455 |
| 20/1 CM | 500 – 515 | 500 – 515 | 500 – 515 | 500 – 515 |
| 30/1 CD | – | – | – | – |
| 32/1 CD HOS UNWAXED 100% COT. | – | – | – | – |
| 30/1 CM | 555 – 565 | 555 – 565 | 555 – 565 | 555 – 565 |
| 32/1 CM | 565 – 575 | 565 – 575 | 565 – 575 | 565 – 575 |
| 24/2 CD | 535 – 545 | 535 – 545 | 535 – 545 | 535 – 545 |
PAKISTAN FABRIC MARKET:
In current week under review the local fabric market showed firm, steady posture whereas improved activity reported in the market for both narrow and wider width fabrics.
Weavers received inquiries in good numbers and also booked orders at improved inflows for both narrow and wider widths.
Weavers have covered their narrow width looms till end April whereas wider width looms are booked till end May and offering onward deliveries.
As weavers are comfortably booked for next 70-90 days for both narrow and wider width looms so Local fabric market expected to remain firm for coming weeks.
Local fabric prices of regular items are as follows.
| Construction | Price US$/YD ExMill |
| 20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN | 1.09 – 1.11 |
| 16X12/108X56 63″ 3/1 | 1.18 – 1.20 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 0.91 – 0.97 |
EXPORT FABRIC MARKET:
Export fabric business went well during the week under review. Customers from Far Eastern and Asian sectors were active. Good number of inquiries were received from Korea, China, Bangladesh, Japan, Vietnam, Thailand, Sri Lanka and Indonesia resultant decent booking with selected suppliers.
Asking prices were stable due to stable raw material prices. Generally customers were expecting better prices for coarse count yarn items but spinning units are not reducing their prices despite of the facts that they have sales pressure on coarser counts that is why fabric suppliers kept their prices stable.
Currently good suppliers are booked till end of early of May and offering mid ~ end May onward deliveries whereas average suppliers are booked till end of April and offering early May ~ mid May deliveries.
It is expected that business activity will remain good in coming days however customers are facing required delivery problems.
European markets were active during the week as customers were actively discussing their new demands. Decent booking was made by Germany, Italy, Spain, Portugal, African origin and USA both in narrow and wider width.
Wider width suppliers are comfortably booked till June and most of the suppliers are now offering July deliveries.
Suppliers are getting good demand in finished fabric like PFD, PFGD and bleached fabric. Some of the customers are inquiring dyed fabric as well so the suppliers are now shifting some of their grey exports to finished fabric.
Following were the closing rates based on CNF Far Eastern markets :-
| Construction | Price US$/YD CNF Far East |
| 20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN | 1.10 – 1.12 |
| 16X12/108X56 63″ 3/1 | 1.22 – 1.24 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 0.92 – 0.94 |
BED LINEN & TOWELS:
Bedding & Towels market is showing reasonable demand patterns especially from USA, Central Europe and Australia. These markets largely vary between prints and solid dyed designs, including embellishments of various types. Pakistan is catering to various thread counts as demanded from these markets.
The demand for basics as well has higher thread counts and GSMs is being catered to by all tiers of factory setups. The major demand is for 76×68, a basic count largely independent in stock and available for regular productions. Yarns supply is well aligned with the demand.
Pakistan is also supplying jersey products in wider width. Many new innovations are being brought to the market in recycled and sustainable yarns for jersey production. Applicable for fitted sheets and baby products, jersey has an established supply from Karachi.
GARMENTS:
Value-added textile sector had been the main driver of the economy for the last 50 years in terms of foreign currency earnings and jobs creation. EU’s recent decision to retain the GSP plus status for Pakistan for another two years has been warmly welcomed by the garment industry of Pakistan.
The PRGMEA’s (Pakistan Ready Made Garment’s Manufacturers Association) chief coordinator said in a recent meeting that a close consultation with the stakeholders needed to determine issues being confronted by the industry and then to suggest measures to ensure its viability and competitiveness in the international market. It is the time to enhancing the product lines of the country’s exports and for that purpose some incentives should also be announced by the government for the motivation of our exporters.
There is still a room to increase product line as foreign buyers demand new garments based on G3, G4 and technical fabric material, we need to offer more diversified products to take benefit from the GSP Plus status. At the moment factories have space to offer deliveries from June 2020 onward according to the types of the garment.
GOING FORWARD:
The domestic yarn market is expected to remain stable and soft. Further price trends will be according to demand and supply of different counts which will lead price level.
Improved business activity was observed in local fabric market and expected to remain good in days to come.
Market showed betterment with some new business as well as opening of old lc’s for export yarn. so, we might see improved business activity in days to come.
Export fabric business is good and will remain active in days to come. Grey business activity is getting less however PFD, PFGD and dyed fabric business volume is increasing. European markets are responding well with decent demand both in grey and finished fabric. Suppliers are expecting good demand in coming days as well.
In the coming weeks bedding & towels market will see ample of order bookings with bright innovations being brought to the market as capital investment continues.
With the recent extension in GSP Plus status for another two years, Pakistan’s Garment Industry is fully geared to cater to foreign buyers’ requirements.
Local cotton market remained dull. Cotton production decreased about 20.26% however spinning units are importing cotton from USA to cover the short fall.
