PAKISTAN COTTON MARKET:
In the local cotton market during last week, new season 2020-2021 crop trading has started in the cotton market. Increasing trend was witnessed in the market because of the decrease in supply of Phutti due to rains in the cotton producing area of Sindh. Buyers were taking interest in the buying of both old and new cotton.
Rains are good for cotton crop. According to the metrological department it is expected that there will be heavy rainfall in the areas of Sindh including Karachi, Badin, Thahtha, Hyderabad and Mirpurkhas.
In Sindh 15 ginning factories have started their operations partially while the supply of Phutti is very limited. When the rate of the Phutti rises, these factories stopped their operation. Same is the situation in Punjab. Phutti in Punjab is coming from Sindh. However, Phutti has started arriving from some areas of Punjab but the ginners were hesitant to buy because it is costly.
In the local cotton market during the last week the increasing trend in the prices of cotton witnessed because of the delivery of Phutti in limited amount as well as due to the buying by the international cotton firm. The KCA has issued the new spot rate for the crop of new season of 2020-21 from July 1 which closes at Rs 8400 per maund. If the cotton prices increase in the local market then big mills will start signing agreements for the import of cotton from abroad particularly from Brazil and Argentina where cotton is available on 60 cent locally which is equal to Rs 8000 to Rs 8200. Many groups have signed agreements in limited number for the import of cotton from Brazil and Argentina. As the big groups have the facility of DTRE due to which they are exempted from paying duty on the import of cotton so they can import cotton throughout the year without paying duty. The duty has been imposed on the import of cotton from June 30.The increasing trend was witnessed in Rate of New York cotton. One reason is that due to the less rains in the America’s cotton growing state Texas cotton sowing has decreased. Secondly, due to the easing of lockdown businesses has started opening up and there is a significant increase in number of jobs.
Increase in the prices of cotton witnessed in China while the rate of cotton remained stable in Brazil and Argentina. Over all bearish trend was seen in the prices of cotton in India.
The rate of cotton in Sindh is in between Rs 8400 to Rs 8500 per maund. The rate of Phutti is in between Rs 4200 to Rs 4300 per 40 kg. The rate of cotton in Punjab is in between Rs 8800 to Rs 8900 per maund. Overall prices of new cotton were in the range of USC 60~65 Lbs. (8400~8,900/ maund).
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 54.00 | 54.00 | 0.00 |
| Highest | 64.00 | 64.00 | 0.00 |
CRUDE OIL:
Crude Oil prices opened at USD 39.70 with higher level as compared to last week closing figures.
In this week, crude oil price showed mix trend and closed on positive side at the end of week.
In last day of the week, Crude Oil price closed at USD 39.82 with increase of USD 0.12 cents as of opening figure of week.
| Lowest | Highest | Change | |
| Price | 39.70 | 39.82 | -0.12 |
EXCHANGE RATE:
In last week values of Pak rupee slightly appreciated 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 1.13 and British Pound also closed on positive note with figure 1.25 against USD.
| Selling | Buying | |
| LC Sight | 166.71 | 166.66 |
| LC 120 Days | 165.40 | 165.35 |
| Open Market | 168.97 | 165.13 |
NEW YORK COTTON FUTURE:
New York Cotton futures opened on higher levels on Monday as compare to previous week’s closing figures.
NYCF showed upward trend in this week and closed on positive side by the end of week.
At last day of the week, JULY 2020 closed at 63.05 with increase of 343 points.
At last day of the week, OCT 2020 closed at 63.55 with upward 342 point.
At last day of the week, DEC 2020 closed at 62.95 with rose of 332 point.
PAKISTAN YARN MARKET:
Local yarn market jumped up after so many long times after lockdown. Prices were gradually increased by mills and most of demand was in 30/1cd and 40/1 combed. Coarse count was limited demand and some mills still have carrying stock.
PSF prices was jumped up by Rs.2/kg as on 29th May 2020 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. For next week, prices are expected to remains stable.
Faisalabad trading market was staple in term of prices and reasonable demand was in staple counts. Most of mills shifted their production on viscose counts. Demand for 31/pc and 24/1pc was there but prices was marginally jumped but demand for 30/1cd and 32/1cd give boost in prices as well.
Following are current asking prices of yarn in local market based on ex mills:
| Count | Price US$/Bale |
| 16/1 CD | 370 – 385 |
| 20/1 CD | 385 – 405 |
| 30/1 CD | 460 – 480 |
| 20/1 CM | 465 – 480 |
| 30/1 PC 52:48 | 370 – 385 |
| 40/1 CM | 545 – 570 |
| 60/1 CM | 795 – 835 |
| 80/1 CM | 1075 – 1190 |
EXPORT YARN MARKET:
Market remained firm and stable with good business activity. Customers remained in market and kept on checking prices. Good numbers of orders have been placed as well during the current week. This is very healthy sign that demand is increasing and customers have started placing orders.
Suppliers are also under comfortable zone now as they are not keeping any stocks and running the productions smoothly. It has been observed that both domestic and export market customers were active. However, domestic prices are much better as compared with export prices. so, it depends on each suppliers to choose which market to sell but matter of fact is that demand is good.
Chinese customers remained under average trading activity and placed orders with selected suppliers. Good sign is that lcs are also opening by the customers before the shipments. European customers are also getting better and positive signs prevailed in market. Customers have started buying and some orders were placed.
| Count | Korea | Hong Kong | Taiwan | Japan |
| 16/1 CD | 395 – 405 | 395 – 405 | 395 – 405 | 395 – 405 |
| 20/1 CD | 405 – 415 | 405 – 415 | 405 – 415 | 405 – 415 |
| 20/1 CM | 475 – 485 | 475 – 485 | 475 – 485 | 475 – 485 |
| 30/1 CD | – | – | – | – |
| 32/1 CD HOS UNWAXED 100% COT. | – | – | – | – |
| 30/1 CM | 500 – 510 | 500 – 510 | 500 – 510 | 500 – 510 |
| 32/1 CM | 510 – 520 | 510 – 520 | 510 – 520 | 510 – 520 |
| 24/2 CD | 465 – 475 | 465 – 475 | 465 – 475 | – |
PAKISTAN FABRIC MARKET:
In current week under review the local fabric remained slow and negligible business reported for both narrow and wider width fabric markets. Weavers received limited inquiries and also confirmed some orders after tough negotiation at slightly reduced inflows for both narrow and wider width fabrics. Weavers are carrying their old productions as buyers are not lifting their stocks therefore weaving units are in under great pressure due to heavy stocks.
Currently weavers are booked in narrow width loom till early August’’2020 whereas wider width looms till mid-august’2020 ~ 3rd week August’20 and offering onward deliveries.
Local fabric prices of regular items are as follows.
| Construction | Price US$/YD ExMill |
| 20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN | 0.88 – 0.90 |
| 16X12/108X56 63″ 3/1 | 0.99 – 1.01 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 0.74-0.76 |
EXPORT FABRIC MARKET:
Export fabric market remained slow during the week under review due to slow demand. Limited inquiries were received from China, Korea, Japan, Bangladesh and Sri Lanka resultant limited buying with mainly air jet units. Asking prices were stable despite of the fact that raw material prices are increased but this made average out due to depreciate our local currency against US.Dollar about 2%.
Covid-19 smart lock down results are very encouraging as the new cases are decreased. The smart lock down in many areas are over which were imposed two weeks before. This will help to improve business activity as well. Currently good suppliers are booked till mid of Aug whereas average suppliers are booked till end of July and offering onward deliveries. It is forecasted that business activity will improve in coming days.
Slow market sentiment was observed from European and USA customers while the lock down in many countries are ease out.
Limited inquiries were received from may parts of the Europe including France, Italy, Spain and Portugal but no bulk buying was witnessed.
Prices for wider width were stable and suppliers are booked till end of Aug. They are offering Sep deliveries. European customers will go on their summer holidays from next week so the business activity may remain slow for next couple of weeks.
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 | 0.92 – 0.94 |
| 16X12/108X56 63″ 3/1 | 1.02 – 1.04 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 0.76 – 0.78 |
BED LINEN & TOWELS:
Bedding manufacturers in Pakistan are booked until December 2020, thanks to the re-opening of foreign brands. The demand forecast has definitely changed and affected the order volume which were expected to exceed 20 to 25% from last year. But this year they are either on the same levels or will shrink. Towels manufacturers are on the same trend as the bedding manufacturers but because of a fewer competition and players in the market, the prices have remained stable. Delivery dates are stretching to over 85 days. Though this is ideal but it is to be remembered that delays are expected because manufacturers are busy clearing up their order backlogs.
GARMENTS:
With the gradual resuming of activities from foreign buyers; Pakistan has started receiving new inquiries of apparel products as we manufacture and export low-cost products in all categories of textiles . Some business finalization was also reported. The orders are a mix of new ones and the ones which were put on hold. Some factories have also received orders of PPE (Personal Protective Equipment) including face masks and overall gowns as the demand of these items have increased due to current Covid-19 scenario.
Advisor to Prime Minister recently said that traditional exports of Pakistan such as garments and bedwear were also picking up and would depict improved performance in new financial year 2020-21 as the Government is supporting exporters to increase exports. Factories are offering ninety days and above lead times depending on the product type and space available with them.
GOING FORWARD:
Activity for the local cotton improved last week, buyers showed their interest and tried to cover stocks due to which prices also increased. China may start buying from Pakistan and price is expected to rise further.
Domestic yarn market is expected to remain stable and firm according to buyer as per need.
We may foresee same slow buying trend for both narrow and wider width looms for coming weeks in domestic market.
Market remained under good business activity for export yarn and customers have placed reasonable quantities order. We might see further improvement in market in days to come.
For export fabric, the business activity from European will remain slow during this month due to their summer holidays however USA market may remained mixed with limited business activity for basic items only. Far Eastern markets were mixed during the week and it seems slow business in next week due to slow demand.
Bedding and towels manufacturers are booked with handsome orders until Dec 2020. This will keep the prices stable until major shift in raw material is experienced.
Coming time will define the buying pattern of customers if they make any changes to the designs and styles of the garments which they used to buy on regular basis.
