Market Report – Pakistan 15 June 2020

PAKISTAN COTTON MARKET:

In the local cotton market during last week, new season 2020-2021 crop trading has started in the cotton market. Around 3000 bales were traded in between Rs. 7900 to 8000 per maund.

One ginning factory of Sanghar Sindh cleared the deal of 200 bales of cotton sold at Rs. 7800 per maund. Two ginning factories of Burewala Punjab sold 400 bales between Rs. 8450 and Rs. 8500. In this way partial trading of new season 2020-21 has started.
On the other hand it is first time in the history of Pakistan that seed companies are buying Banola between Rs. 2500 to Rs. 2600 per maund for using it as seed. Good quality seeds are not available in the market. Usually the price of Banola is between Rs. 1750 and Rs. 1800.
Moreover, it is feared that this year it is expected that agriculture production as well as cotton crop will be badly affected by the attack of locusts. Currently, locusts have damaged cotton plants in some areas due to which cotton has to be sown two or three times in the coming days as there is a serious threat of pending locust attack.

The budget for 2020-21, presented on June 12, has been described as disappointing by the business and industry circles. The textile and ginning sector closely associated with the cotton has been ignored. Almost all the institutions and associations related to textile and export sector have shown their disappointment on the budget and some have rejected the budget.

Mixed trend was witnessed in international cotton market. Bearish trend was seen in New York Cotton Market after fluctuation. Rate of New York cotton fell from 62.63 cent to 59 US cents. Although according to the weekly USDA export report the exports remained stable. China emerges as a big buyer. The rate of cotton remained stable in China while increasing trend was witnessed in India.

Prices of old season cotton is available from Sindh in range from Rs. 7800 to Rs. 8500 per maund (37.32 Kgs). In Punjab prices in range from Rs. 8000 to Rs. 8600 per maund (37.32 Kgs). Overall prices of old cotton were in the range of USC 58~64 Lbs. (7800~8,600/ maund).

	Opening Of the Week	Closing Of the Week	Change
Lowest	56.00	55.00	1.00
Highest	64.00	62.00	2.00

CRUDE OIL:

Crude Oil prices opened at USD 39.19 with slight lower level as compared to last week closing figures.
In this week, crude oil price rose upward in two sessions and later dropped till closing, moreover, closed on negative side at the end of week.

In last day of the week, Crude Oil price closed at USD 36.26 with decrease of USD 1.93 cents as of opening figure of week.

	Lowest	Highest	Change
Price	38.19	36.26	1.93

EXCHANGE RATE:

Pakistan Currency Exchange Rates
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 1.12 and British Pound also closed on negative note with figure 1.25 against USD.

	Selling	Buying
LC Sight	164.39	164.34
LC 120 Days	162.85	162.80
Open Market	166.60	162.81

NEW YORK COTTON FUTURE:

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

At last day of the week, JULY 2020 closed at 59.84 with rose of 97 points.
At last day of the week, OCT 2020 closed at 59.58 with surge up of 154 point.
At last day of the week, DEC 2020 closed at 59.03 with increase of 134 point.

PAKISTAN YARN MARKET:

Local yarn market remained under sale pressure another week in a row and average business activity was reported in domestic market during last week ended. Most of weavers were shifted in house and major buying shifted to their related spinning units. Suppliers are interested to work and they try to meet customer target bid to get orders. No one mill carrying such stocks and delivery mills managing on customer required dates.

PSF prices remained stable domestic market during this week due to limited production of IFL plant. PTA, MEG prices were stable after stable prices of oil in international market and same followed by International polyester fiber.

Faisalabad trading market was active in staple fiber yarn and good activity was there in last week. Trader was now clear about sale tax after budget and they took their positions in buying as well, cotton and blended yarn activity was reported limited by end of the week.

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

Count	Price US$/Bale
16/1 CD	365 – 380
20/1 CD	385 – 405
30/1 CD	450 – 460
20/1 CM	455 – 470
30/1 PC 52:48	365 – 385
40/1 CM	535 – 565
60/1 CM	795 – 830
80/1 CM	1090 – 1200

EXPORT YARN MARKET:

Market remained sluggish whole week due to dull demand from buyers. Limited enquiries were floated against which order confirmation was almost nil. Over all CCOVID-19 impact on economies are huge and it is disturbing business everywhere.

We might see another phase of slow business in days to come as things are still not under control which has slowed down the demand from all regions. Customers are placing yarn orders only as per demand which is shrinking from end customers as well. So, it seems month of June will remain under lackluster business activity.
Chinese customers remained under wait and see mode as they were not showing interest to place orders. It seems they have booked handsome quantities in recent past due to which they are on side line and watching market carefully.

European customers are also remained under wait and see mode and very few enquiries were floated against which order confirmation was minimal.

Count	Korea	Hong Kong	Taiwan	Japan
16/1 CD	390 – 400	390 – 400	390 – 400	390 – 400
20/1 CD	400 – 410	400 – 410	400 – 410	400 – 410
20/1 CM	470 – 480	470 – 480	470 – 480	470 – 480
30/1 CD	–	–	–	–
32/1 CD HOS UNWAXED 100% COT.	–	–	–	–
30/1 CM	495 – 505	495 – 505	495 – 505	495 – 505
32/1 CM	505 – 515	505 – 515	505 – 515	505 – 515
24/2 CD	460 – 470	460 – 470	460 – 470	–

PAKISTAN FABRIC MARKET:

Local fabric market remained dull throughout the week for both narrow and wider width fabric markets.
Weavers received limited number of inquiries from local buyers and also booked some orders after tough negotiation at reduced looms inflows.

Limited business materialization reported in the market and weavers extended their looms coverage for another week which will help the weavers to keep offers firm for coming weeks.

Buyers are still bidding very low and there is a difference of almost 5-8% in offered price and bid price.
Narrow and wider width looms deliveries are available by end July’20 onward and weavers are offering early~mid August’20 onward delivery in wider width.

Local Fabric prices of regular items are as follows:

Construction	Price US$/YD Ex Mill
20CDX16CD/128X60 –  63″  3/1 ”S” TWILL PAK CTN	0.92 – 0.94
16X12/108X56 63″  3/1	1.04 – 1.06
20CDX20CD/108X58 63″  3/1 ”S” TWILL PAK CTN	0.76 – 0.78

EXPORT FABRIC MARKET:

After having good business activity during last couple of weeks, the last week went slow in term of inquiries and booking. Limited number of inquiries were received from Korea, China, Bangladesh and Japan resulting limited booking with selected suppliers in small quantities. No bulk order was reported during the week.
Yarn prices get firm towards end of the week however suppliers were still able to get previous prices after negotiations.

Currently good suppliers are booked till mid of July and offering end July onward deliveries however average suppliers are still offering mid July onward shipments.

Suppliers got good orders in 1/1 hence the delivery for 1/1 is available from early ~ mid Aug onward mostly. other weaves like 2/1, 3/1 or 4/1 has no problem as suppliers can free the space according to the customer requirement.No considerable inquiries were received from European, African and USA market. Nominal business activity was reported from Germany, Spain and Italy. Wider width suppliers are offering early ~ mid Aug onward deliveries.

Construction	Price US$/YD CNF Far East
20CDX16CD/128X60 –  63″  3/1 ”S” TWILL PAK CTN	0.96 – 0.98
16X12/108X56 63″  3/1	1.04 – 1.06
20CDX20CD/108X58 63″  3/1 ”S” TWILL PAK CTN	0.80 – 0.82

BED LINEN & TOWELS:

Bedding & Towels market remained balanced out as many manufacturers were waiting for the announcement of new federal and provincial budgets which are to define the new tax regimes. Luckily no new tax has been imposed by the government and on about 20000 items of import to be used as raw material, taxes have been abolished.

It sure is a sigh of relief but yet it is to be seen in what items the taxes have been reduced or removed which will get clear in days to come.

On the other hand many manufacturers are compromising on their margins to meet the global demand on reduced buying power and limited supplies. Many international buyers however have opted for digital printing of bedding articles due to eCommerce supply, another major shift to accommodate reduced demand and quantities.

GARMENTS:

Pakistan’s apparel industry is resuming gradually during Covid-19 scenario. While surely a lot will depend on how quickly the EU and USA markets recover and by when would the traditional customers of Pakistani Textiles be able to resume buying in a meaningful way.

At the same time a lot will also depend on the Pakistani government on how serious it is to save the textile exporting industry from being dismantled and to what extent it is willing to go in helping them to ride out this critical period till such time when markets gradually return to normalcy.

GOING FORWARD:

Local yarn is expected to remain under sale pressure for next few weeks and cash crunch is still in market related to major units.
Activity remained dull, buyers are not interested to make deals due to financial crunch and as well as they have a sufficient cotton in their stocks. New crop size is seeming not satisfactory due to low seed germination.

Local fabric market was dull throughout the week. Limited inquiries were received and orders booked at less prices. It is expected that business activity for local fabric may remain slow in coming weeks until the International brands started buying finishes goods.

Export yarn market remained under lethargic business activity due to uncertainty all around the world economies.
Comparatively less business activity was reported during last week for Asian, Far Eastern, European and USA market. Suppliers have good orders in hand for 1/1 plain whereas other weave fabric deliveries are available in next 30 ~ 40 days lead time.

Garment factories in Pakistan has resumed working gradually but all will depend on how and when two main markets of EU and USA recover and start placing orders in bulk.
Coming days will define the customer demand patterns and manufacturers adaptation to the bedding and towels business.