PAKISTAN COTTON MARKET:
Last week in the local cotton market, Moderate business trend was seen, quality and supply of Phutti was affected due to the hefty monsoon rains. Picking of Phutti was also affected due to rains. So conscious buying was observed. News about damage of crop pushed the rates on higher side. Local cotton prices increased 100~150 Rs in this week. KCA also increased rs.150 and touched the level of rs. 8650/maund.
Heavy rain fall has increased the risk of damage to major crops, including cotton, onion and other vegetables in the fields, mostly in Sindh. As per news that farmers are claiming that 25% cotton crop is damaged due to rains in Sindh.The sowing in Pakistan was already poor as compared to the expectations because of low quality seeds. Thus, it is becoming difficult to estimate cotton production. Punjab government is claiming that 75 lac bales will be produced in the province while if 30 lac to 35 lac bales will be produced in Sindh then it is estimated that one crore 10 lac (11,000,000) bales will be produced in the country. However, according to the estimates of the private experts the cotton production will be around 87 lac bales.
The rate of cotton in Sindh is in between Rs 8675 to Rs 8800 per maund. The rate of Phutti in Sindh is in between Rs 3700 to Rs 4100 per 40 kg. The rate of cotton in Punjab is in between Rs 8700 to Rs 9000 per maund. the rate of Phutti in Punjab is in between Rs 3800 to 4200 per 40 kgs. Overall prices of new cotton were in the range of USC 63~65 Lbs. (8675~9000/ maund).
Under the influence of increasing trends in the rate of cotton internationally, the rate of local cotton increased as well as improved buying was seen. Although rains have increased the fear of damage to the cotton crop. So, most of the buyers are also focusing on import of cotton.
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 60.00 | 63.00 | -3.00 |
| Highest | 63.00 | 65.00 | -2.00 |
CRUDE OIL:
Crude Oil prices opened at USD 42.62 with higher level as compared to last week closing figures.
In this week, crude oil prices rose in next session and dropped in last two sessions hence closed on positive side at the end of week.
In last day of the week, Crude Oil price closed at USD 42.97 with increase of USD 0.35 cents as of opening figure of week.
| Lowest | Highest | Change | |
| Price | 42.62 | 42.97 | -0.35 |
EXCHANGE RATE:
In last week values of Pak rupee 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 1.19 and British Pound also closed on positive note with figure 1.33 against USD.
| Selling | Buying | |
| LC Sight | 168.33 | 168.28 |
| LC 120 Days | 167.56 | 167.51 |
| Open Market | 170.49 | 166.62 |
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 trend in this week and closed on negative side by the end of week.
At last day of the week, OCT 2020 closed at 64.37 with decrease of 79 point.
At last day of the week, DEC 2020 closed at 65.08 with drop of 74 point.
At last day of the week, MAR 2021 closed at 65.93 with downward of 70 points.
PAKISTAN YARN MARKET:
Local yarn market remained up in term of calling prices and reasonable activity was reported in market. Due to cotton crop quantity is short and prices are jumping on daily basis; it cause increase in prices of yarn in domestic market. On the other hand, weavers were also busy to cover yarn against their sold fabric order.
PSF prices were stable during last week ended. 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 remain stable. Faisalabad trading market was stable and limited activity was reported for last week ended. Demand was picked up in staple fiber as well as in fine counts yarn whereas 30/1cd and 31/1pc yarn remained slow.
Following are current asking prices of yarn in local market based on ex mills:
| Count | Price US$/Bale |
| 16/1 CD | 390 – 410 |
| 20/1 CD | 420 – 435 |
| 30/1 CD | 485 – 500 |
| 20/1 CM | 485 – 505 |
| 30/1 PC 52:48 | 385 – 400 |
| 40/1 CM | 590 – 610 |
| 60/1 CM | 830 – 890 |
| 80/1 CM | 1095 – 1195 |
EXPORT YARN MARKET:
Market remained firm and stable with limited business activity. Suppliers kept on increasing prices after making sales as they are under comfortable sale situation. Most of the suppliers have sold September and offering October shipments. We might see good demand from customers once Europe is open next week as they have a lot of pending enquiries which are expected to be concluded after their holidays. So, in short, market will remained firm with tendency to increase further.
Chinese customers floated handsome number of enquiries but order materialization was slight slow due to high asking prices. Although customers have improved their prices 5-7% but still suppliers are far away from customers bids. Major reason for such high asking prices and firmness from suppliers is good demand from domestic market which is keeping export yarn prices on upward side. It is expected that customers have to increase their prices to catch orders as suppliers are not willing to reduce their prices at all.
European customers remained on holidays and nominal activity was witnessed.
| Count | Korea | Hong Kong | Taiwan | Japan |
| 16/1 CD | 415 – 425 | 415 – 425 | 415 – 425 | 415 – 425 |
| 20/1 CD | 425 – 435 | 425 – 435 | 425 – 435 | 425 – 435 |
| 20/1 CM | 495 – 505 | 495 – 505 | 495 – 505 | 495 – 505 |
| 30/1 CD | – | – | – | – |
| 32/1 CD HOS UNWAXED 100% COT. | – | – | – | – |
| 30/1 CM | 520 – 530 | 520 – 530 | 520 – 530 | 520 – 530 |
| 32/1 CM | 530 – 540 | 530 – 540 | 530 – 540 | 530 – 540 |
| 24/2 CD | 485 – 495 | 485 – 495 | 485 – 495 | – |
PAKISTAN FABRIC MARKET:
The local fabric market remained range bound and slow sentiments prevailed throughout the week for both narrow and wider width fabric.
Weavers received limited inquiries and also booked some orders after tough negotiations at slightly increased price level for both narrow and wider width fabrics.
Buyers are unable to float bulk inquiries because Corona virus pandemic still affecting market sentiments and buyers are clueless to place new orders.
Buyers are still unable to lift their old stocks because they are not getting go-ahead from their foreign counterparts to start processing their held orders.
In narrow width weavers are booked till 3rd week-September’20~end September’20 whereas wider width looms till 3rd week October’20~ end October’20 and offering onward deliveries
Local fabric prices of regular items are as follows.
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EXPORT FABRIC MARKET:
Far Eastern market was active during the week as customers from Korea, China, Bangladesh and Japan were active however limited buying was noticed. Most of the bulk orders are held by the customers due to price difference. Customers were asking 4~5% lower that the existing price level where suppliers could not manage. Vietnam, Thailand and other markets remained aside of buying. Asking prices were firm with upward trend due to increase in raw cotton and yarn prices. Another factor is that cotton production is less than the targets and also cotton damage in Sindh area due to heavy rains.
Prices from India also increasing which hope that customers will take buying decision soon. Currently good suppliers are booked till mid of Oct and offering end Oct onward deliveries whereas average suppliers are booked till end of Sep and offering early ~ mid Oct onward deliveries.
European customers are expected to resume their work from first week of Sep so the business activity from Europe remains limited during the week however good number of inquiries were received from Portugal resultant limited buying with the selected suppliers.
Wider width suppliers have extended their sales and now offering Nov & Dec deliveries. Since they have good sales coverage hence their prices are firm with upward trend. USA market still not responding that is why no considerable inquiries were reported during the week under review.
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 | 1.02 – 1.04 |
| 16X12/108X56 63″ 3/1 | 1.12 – 1.14 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 0.86 – 0.88 |
BED LINEN & TOWELS:
Last week has been slow in terms of receiving new product inquiries due to the western world being away for summer vacations. Most probably inquiries are expected to be received this week onwards as a lot of buyers will be back in their offices. And on the pacific side especially that of Australia, the lockdown in their major hub of Melbourne still continues and business is quite badly hit due to controlled spending from the consumer.
Overall the market is quite booked in Pakistan for both bedding and towel articles, much of this has been contributed by manufacturers directly booking orders by compromising on their margins despite expensive raw material, this step of theirs is not at all sustainable and will hit the retailers and importers once the market corrects itself.
Inquiries in bedding and towel industry will continue to float starting this week, whereas the overall productions are well placed and ongoing.
GARMENTS:
After having been suffered from Covid-19 garment industry has resumed its operations. Pressure has been put on industry’s supply chain after abrupt order cancellations, held payments, enforced factory and store closure. Overall working is back to normal by now. With the reopening of factories, sustainability remains an important element. Brands and suppliers need to align their sustainability goals and consider this equally important as that of quality, cost and lead times.
Factories in Pakistan have already set their strategies as sustainability an important element along with other factors. Healthy number of inquiries were shared in recent past and business was also matured after negotiation. Prices have been firm by the suppliers considering firm raw material prices.
At the moment factories have orders in hand to meet their production capacities in full and offering lead times from December onward for the new inquiries. During the week heavy rains in Karachi area have made it flood like situation in most of the areas which caused the normal life including working at factories to a halt till weekend. This will impact to slide the deliveries of in hand orders ahead as water also entered in the production area causing a lot of loss to raw materials lying in the godowns/stores and made working condition difficult.
Garment factories in Pakistan have orders in hand and working in full capacity. Lead times are being offered from December onward for the new inquiries.
GOING FORWARD:
Under the influence of increasing trends in the rate of cotton internationally, the rate of local cotton increased as well as improved buying was seen.
Although rains have increased the fear of damage to the cotton crop. So, most of the buyers are also focusing on import of cotton. Local yarn market is expected that domestic yarn market will be remained dependent on raw cotton prices for next few weeks and prices will be according to demand and supply in each count of yarn.
Local fabric market may remain firm with limited trading activity for both narrow and wider width looms.
Export fabric prices may remain firm and business activity will remain good in coming days.
Garment factories in Pakistan have orders in hand and working in full capacity. Lead times are being offered from December onward for the new inquiries.
Inquiries in bedding and towel industry will continue to float starting this week, whereas the overall productions are well placed and ongoing.
