Market Report – Pakistan10 Aug 2020

PAKISTAN COTTON MARKET:

Last week in the local cotton market, modest business was seen by mills. Most of the buyers were remained on sideline but needy buyers showed interest to cover their immediate requirements. Heavy and continuous rains may affect the quality of Phutti as well as supply of the Phutti. Overall supply of Phutti increasing gradually. New ginning factories are starting their operations. In Punjab ginning factories has started their operations in many areas. The demand of Phutti as well as trading volume is increasing. Prices of cotton witnessed an increase of Rs 200 to Rs 250 per maund.The KCA increased rs.150 and touched the level of Rs 8250 per maund.

Over all mixed trend was seen in the international cotton market. New York Cotton prices have risen by three cent and decrease in the rate of dollar as well as according to the weekly USDA export report China was the biggest importer. The Rate of New York Cotton reached as high as 64 cent per pound. After the news of rising tension between China and America the rate of New York cotton decreased by three American cents.
The rate of cotton remained stable in Brazil and Argentina while the increasing trend was seen in the rate of cotton in China while the rate of cotton remained stable in India.

The rate of cotton in Sindh is in between Rs 8150 to Rs 8300 per maund. The rate of Phutti in Sindh is in between Rs 3200 to Rs 3700 per 40 kg. The rate of cotton in Punjab is in between Rs 8150 to Rs 8550 per maund. the rate of Phutti in Punjab is in between Rs 3600 to 4000 per 40 kgs. Overall prices of new cotton were in the range of USC 59~62 Lbs. (8150~8,550/ maund).

Modest business activity was observed last week. Due to the starting of spell of rains in many areas of Punjab and Sindh the supply of Phutti will be decreased as well as the quality of Phutti will also be affected. It is feared that production of cotton crop will be affected in the cotton producing areas of Sindh because of rains. If rainwater collects in the field, it will damage the crops. Rains also increase the risk of attack of viruses and insects on the crop. Farmers need to be careful.

	Opening Of the Week	Closing Of the Week	Change
Lowest	57.00	56.00	1.00
Highest	61.00	61.00	0.00

CRUDE OIL:

Crude Oil prices opened at USD 41.01 with higher level as compared to last week closing figures.
In this week, crude oil price showed mix trend with minor fluctuation, hence closed on positive side at the end of week.
In last day of the week, Crude Oil price closed at USD 41.22 with increase of USD 0.21 cents as of opening figure of week.

	Lowest	Highest	Change
Price	41.01	41.22	-0.21

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 positive note with figure of 1.18 and British Pound also closed on positive note with figure 1.30 against USD.

	Selling	Buying
LC Sight	168.07	168.02
LC 120 Days	167.51	167.46
Open Market	170.19	166.32

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 whole week, while dropped on last session and closed on negative side by the end of week.

At last day of the week, OCT 2020 closed at 61.88 with drop of 165 point.
At last day of the week, DEC 2020 closed at 62.36 with downward of 151 point.
At last day of the week, MAR 2021 closed at 63.19 with decrease of 135 points.

PAKISTAN YARN MARKET:

Local yarn market opened with firm asking after little devaluation of Pak Rupee against US$. Most of weavers were firm in asking prices and were selling yarn with some improved rates. Activity from 16/1cd and fine count was good in market. There is no stock selling pressure on any spinning unit.

PSF prices dropped Rs.2/kg on 3rd Aug 2020 by IFL due to price gap in import Fiber. 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 stable and average activity reported for last week ended. Regular demand was witnessed in staple fiber and 30/1cd and 31/1pc yarn. About future market it is expected that domestic yarn market will be remained stable and firm according to buyer as per need.

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

Count	Price US$/Bale
16/1 CD	375 – 390
20/1 CD	400 – 415
30/1 CD	475 – 490
20/1 CM	470 – 485
30/1 PC 52:48	385 – 395
40/1 CM	575 – 595
60/1 CM	820 – 880
80/1 CM	1080 – 1180

EXPORT YARN MARKET:

Market remained under good business activity throughout the week.
Customers have been floating good numbers of enquiries against which order materialization has been witnessed as well.

We might see another wave of buying form customer in Far East, China and Europe.
Overall prices are firm and stable with tendency to increase as all suppliers are comfortably booked due to good orders placements by buyers in last couple of weeks.So, we might see firm and stable sentiment with good business activity in days to come.

There is handsome demand from domestic market as well which is sign to keep prices firm and stable.
Chinese customers remained under handsome trading activity and placed orders with selected suppliers.
European customers remained very active this week and floated very good numbers of enquiries. Orders are also confirmed and some are under discussion which are expected to be confirmed in next week.

Count	Korea	Hong Kong	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	485 – 495	485 – 495	485 – 495	485 – 495
30/1 CD	–	–	–	–
32/1 CD HOS UNWAXED 100% COT.	–	–	–	–
30/1 CM	510 – 520	510 – 520	510 – 520	510 – 520
32/1 CM	520 – 530	520 – 530	520 – 530	520 – 530
24/2 CD	475 – 485	475 – 485	475 – 485	–

PAKISTAN FABRIC MARKET:

The scaring local fabric market closed with modest activity in current week under review for both narrow and wider width fabric markets. Corona virus outbreak strengthens its hold on the world and Buyers expectations about a recovery are losing momentum and little hope of business activity still keeping market alive. Week closed with limited orders at last week inflows but currency fluctuation kept the price trend moving up.

Weavers are feeling pressure of financial cost of produced stocks. In narrow width loom weavers are booked till early~mid September’20 whereas wider width looms till October mainly and offering onward deliveries
Moving forward we expect the market to remain slow with limited trading activity for both narrow and wider width looms 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	0.99 – 1.01
16X12/108X56 63″  3/1	1.07 – 1.09
20CDX20CD/108X58 63″  3/1 ”S” TWILL PAK CTN	0.82 – 0.84

EXPORT FABRIC MARKET:

Generally slow market sentiment was noticed during the week. Limited numbers of inquiries were received from Korea, China, Bangladesh, Japan and Sri Lanka resultant limited business finalized. Suppliers have increased their asking prices about 2% due to hike in yarn prices.

Fabric business remained slow however yarn business is good hence the yarn prices are increased due to good booking, less cotton production this year. Currently good suppliers are booked till end of Sep and offering early ~ mid Oct onward deliveries. Average suppliers are booked till mid of Sep and offering end Sep onward deliveries.

Limited inquiries were received from European customers due to holiday season. Most of the customers are not available hence the business activity is less. Wider width suppliers have already good booking in hand hence they are very comfortable. They are offering Nov deliveries mainly.

USA buers were also slow during the week as no active inquiries were noticed.

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	1.00 – 1.02
16X12/108X56 63″  3/1	1.08 – 1.10
20CDX20CD/108X58 63″  3/1 ”S” TWILL PAK CTN	0.84 – 0.86

BED LINEN & TOWELS:

Bedding and towels industry has remained well in terms of order placements and inquiry sharing, but the European side is on holiday for the month of August and no further order placements are expected, and the manufacturers in Pakistan will only experience the activity to pick up in September.

In terms of inquiries, we are experiencing an influx of seasonal product variations for costing, same is the case with manufacturers across Pakistan. Yarn prices of 30/1 and above are expected to remain at current levels, whereas correction in weaving is expected in the coming days.

The delivery date is stretching to over 90 days for a fresh new order of 40ft equivalent in both Duvet/sheeting order or any towels order. Coming days will predict if any correction will be seen or not.

GARMENTS:

By now when Pakistani factories have started receiving new orders since the onset of Covid-19, at the same time buyers are placing orders very cautiously due to prevailing uncertainty that how will consumers’ demand emerge going forward. Order volumes have also been seen reduced compared with previous orders during the same time period. Target prices were also on the lower side which suppliers accepted after reworking and negotiation.

Though raw material prices are also on lower side, yet factories face a dent in their profitability from normal margins. It was also seen that some customers also paid for making use of cancelled materials by redesigning or developing them into new products to save fabric cost. At the moment garment factories in Pakistan have space to offer shipments with a lead time of eighty to ninety days on average depending upon the category of the garment and order size.

Costing factor have been dominating with factories for new orders as suppliers have to confirm orders with reduced margins. Foreign buyers are also placing orders very cautiously due to prevailing uncertainty that how will consumers’ demand emerge going forward.

GOING FORWARD:

About future market it is expected that domestic yarn market will be remained stable and firm according to buyer as per need.

Local fabric market is expected to remain slow with limited trading activity for both narrow and wider width looms for coming weeks.

Market remained under handsome business activity with firm and stable price trend for export yarn. It is expected that business activity will pick up further in days to come.

Limited business was noticed from around the globe for fabric market including Far Eastern, Asia, Europe and USA. Suppliers are expecting slow business in coming days as well however prices are expected to remain firm and upward due to hike in raw material prices.

For the Garment sector, costing factor have been dominating with factories for new orders as suppliers have to confirm orders with reduced margins. Foreign buyers are also placing orders very cautiously due to prevailing uncertainty that how will consumers’ demand emerge going forward.

Home textile delivery date is stretching to over 90 days for a fresh new order of 40ft equivalent in both Duvet/sheeting order or any towels order. Coming days will predict if any correction will be seen or not. Order placements were well during the week.

Modest business activity was observed last week in local cotton. Due to the starting of spell of rains in many areas of Punjab and Sindh the supply of Phutti will be decreased as well as the quality of Phutti will also be affected. It is feared that production of cotton crop will be affected in the cotton producing areas of Sindh because of rains. If rainwater collects in the field, it will damage the crops. Rains also increase the risk of attack of viruses and insects on the crop. Farmers need to be careful.