PAKISTAN COTTON MARKET:
In Last week, buyers and spinners were still involved in cautious buying while ginners were also involved in cautious buying. The traders of Phutti were trying to sell Phutti on high rates. In this way the business of cotton is shrinking. On the other hand due to the second wave of COVID19 textile mills and industries producing textile products have adopted a cautious attitude due to which the trading volume is also decreasing.
Everyone is worried about what will happen in the coming days. Overall, there is uncertainty and no one is able to do business openly.
Price of cotton decreased by Rs 100 to Rs 400 per maund. The price of Phutti is also decreasing. The price of good quality cotton was in range of Rs. 9000~9900. KCA decreased rs.300 and touched the level of Rs. 9,600/maund.
Over all fluctuation was witnessed in rates of cotton in international market. The New York cotton market has been volatile for a variety of reasons some times due to fluctuation in the rate of dollar, some times it was effected due to the hurricane, sometimes due to the presidential elections and some times it was effected by fluctuation in exports.
According to the USDA weekly export report the exports decreased by 60% but the market was not affected by it.
Cotton production will be less than the estimates. Moreover, due to the panic situation, rate of NYCF decreased by 1.50 cent. The situation may get clear after issuing of WASDE report on November 10. The rate of cotton remained stable in Brazil, Argentina and China. However, the increasing trend was witnessed in the rate of cotton in India.
According to the statistics released by Pakistan Cotton Ginners Association till October 31st, cotton arrivals declined 43.38 percent to 3.45 million bales against 6.09 million bales in the same month last year, raising concerns that the country would have to import at least 7.0 million bales worth $3 billion to fulfil domestic demand.
Punjab and Sindh showed declines of 45 percent and 41 percent respectively in cotton production during the period under review. Both provinces had stocked 1.7 million bales each till the end of October. Last year, Punjab and Sindh stocked 3.16 million and 2.92 million bales, respectively. According to the report there is a decline of 2.6 million bales in cotton arrivals was a point of concern. As per the importers of cotton agreements for the import of 30 lac bales have been signed.
The price of cotton in Sindh is in between Rs 8800 to Rs 9700 per maund. The price of Phutti in Sindh is in between Rs 3800 to Rs 4700 per 40 kg. The price of cotton in Punjab is in between Rs 9400 to Rs 9900 per maund. the price of Phutti in Punjab is in between Rs 4000 to 4900 per 40 kgs. The price of Phutti in Overall prices of cotton were in the range of USC 68~77 Lbs. (8800~9900/ maund).
|Opening Of the Week||Closing Of the Week||Change|
Crude Oil prices opened at USD 36.81 with high level as compared to last week closing figures.
In this week, crude oil price increased in two session, later showed downward, hence closed on positive side at the end of week.
In last day of the week, Crude Oil price closed at USD 37.14 with increase of USD 0.33 cents as of opening figure of week.
|Opening of Week||Closing Of Week||Change|
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 1.32 against USD.
|LC 120 Days||158.59||158.54|
NEW YORK COTTON FUTURE:
New York Cotton futures opened on lower levels on Monday as compare to previous week’s closing figures.
NYCF rose in next session and later marched downward on negative side till the end of week.
At last day of the week, DEC 2020 closed at 67.76 with decrease of 97 point.
At last day of the week, MAR 2021 closed at 69.32 with downward of 40 points.
At last day of the week, MAY 2021 closed at 70.19 with drop of 33 point.
PAKISTAN YARN MARKET:
Local market remained Quite first week after so many times. All weavers were waiting for correction as NYC, crude Oil, US Dollar and local cotton dropped. On the other hand, suppliers were interested to extend their sale booking on the existing rates.
PSF prices were stable during last week ended. PTA, MEG prices were stable after drop in 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 slow in buying and limited trade was made in all counts of cotton yarn. Blended yarn was also in average demand, and limited sale was reported in all counts.
Following are current asking prices of yarn in local market based on ex mills:
|16/1 CD||475 – 490|
|20/1 CD||495 – 515|
|30/1 CD||550 – 575|
|20/1 CM||560 – 585|
|30/1 PC 52:48||425 – 445|
|40/1 CM||685 – 710|
|60/1 CM||940 – 965|
|80/1 CM||1210 – 1305|
EXPORT YARN MARKET:
Export yarn market remained firm and stable with nominal business activity.
Customers remained on side line as they have booked handsome quantities in last 4-6 weeks. So, they are just staying on side line and only focusing on getting deliveries of old orders.
At the same time, prices were also reached that at level and it is expected that market will witnessed of some correction in prices.
On the other hand, suppliers are firm and stable and not showing any flexibility. They are sold well enough and not in panic. Cotton prices in domestic market are also firm due to shortage of crop in this season.
Hence, we might see market moving only on the basis of demand and supply. Chinese customers kept on checking prices and have confirmed limited orders with required prices and deliveries. As deliveries are dragged forward and prices are touching sky high level, hence, customers are not placing bulk quantity orders now.
European customers kept on checking prices for normal as well as specialized yarns. However, order materialization was slow:
|16/1 CD||460 – 470||460 – 470||460 – 470||460 – 470|
|20/1 CD||480 – 490||480 – 490||40 – 490||480 – 490|
|20/1 CM||535 – 545||535 – 545||535 – 545||535 – 545|
|32/1 CD HOS UNWAXED 100% COT.||–||–||–||–|
|30/1 CM||555 – 565||555 – 565||555 – 565||555 – 565|
|32/1 CM||575 – 585||575 – 585||575 – 585||575 – 585|
|24/2 CD||545 – 555||545 – 555||545 – 555||545 – 555|
PAKISTAN FABRIC MARKET:
The local fabric market remained volatile and showed slight softness in prices because local cotton and yarn prices eased down therefore hint of price correction observed for both narrow and wider width fabrics. Flow of inquiries slowed down as buyers are expecting further downward trend in fabric prices.
Buyers booked limited orders as weavers are not ready to negotiate prices below to their desired inflows. Weavers are comfortably booked in narrow width till end december’20 and in wider width weavers are booked till 3rd week January ~ End January’21 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||1.20 – 1.22|
|16X12/108X56 63″ 3/1||1.30 – 1.32|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||0.98 – 1.00|
EXPORT FABRIC MARKET:
Good trading activity was seen during the week from Far Eastern markets. Customers from Korea, China and Japan has taken interest into new buying and conducted good booking with mainly air jet units. Bulk orders from Bangladesh inquiries in grey fabric was discussed but no considerable business was conducted due to too low target prices from the customers. Vietnam, Thailand, Indonesian customers remained aside of buying during the week under review.
Asking prices were stable due to stable raw material prices. No change in price was seen as suppliers were firm in their asking prices.
Good suppliers are booked till end of Dec and offering mid Jan onward deliveries whereas average suppliers are booked till mid of Dec and offering end Dec onward deliveries for narrow width fabric.
Limited number of inquiries were received from European and USA markets. Most of the European customers has covered their orders from their local trading companies thus limited business was placed with the suppliers in Pakistan.
Wider width suppliers have good sales coverage as they are now offering March onward deliveries. Prices for wider width were stable with firm tone due to firmness in raw material prices.
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||1.20 – 1.22|
|16X12/108X56 63″ 3/1||1.32 – 1.34|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||1.00 – 1.02|
BED LINEN & TOWELS:
Bedding and Towel manufacturers despite being over occupied with their placements are finding it difficult to retain existing customer inquiries, because of sky high prices of raw materials. Though local cotton has started coming down, but the prices are not enough to offset the opportunities lost in the 2 months and still going on during November. Deliveries are stretched up until March 2020 for new orders and for repeats 45 to 50 days.
A healthy flow of inquiries followed by order placements was observed in garment industry of Pakistan. Retailers and brands continue to restart and rebuild their operations following the first wave of pandemic. A number of factories were able to found the gap of producing personal protective equipment (PPE) such as masks and gloves and grabbed the opportunities by maturing the orders early in the pandemic. Supermarkets like Kroger, Tiger Stores, Asda, Tesco and Sainsbury’s make up a large part of its customer base and were the least impacted by Covid as they were open to provide essential food supplies.
November and December are critical months as these are uncertain and volatile. A lot depends on lockdowns imposed in UK and Europe. Pre-Covid retailers were much concerned about price and preferred to go direct. However, today business model has changed. They expect corporate governance and risk management. Traveling is not possible, so they have to trust suppliers are producing the right thing as demanded. This dependency on factories will have its direct positive or negative impact in terms of delivering the required product and services. New inquiries are being offered lead times from ninety to hundred and twenty days depending upon the order size and type of the product.
About future market of local yarn, it is expected that domestic yarn market will be remained dependent on raw material and domestic cotton prices for next seasons which are expected to remains firm due to shortage of quantity and yarn prices will according to demand and supply.
In the local cotton market, comparatively business was slow down due to expected new COVID 19 waves. It is feared that wave of COVID 19 will increase in coming days as result of which price of cotton may come down. Buyers focused on import of cotton, deprecation of US$ against Pak currency also gave edge to buyers.
We expect that local fabric market still have the tendency to stay at current level but covid19 factor may play a crucial role in setting market direction for coming weeks.
Export yarn market remained firm and stable with sluggish business activity. Suppliers remained firm with no flexibility in prices whereas customers adopted wait and see sentiment.
Far Eastern markets for fabric is expected to remain slow with average business activity for coming weeks and prices will remain stable. European and USA sector is also expected to remain mix with average business activity due to second wave of Covid-19.
As the retail business is returning, it has the direct impact on garment order placements with factories in Pakistan. A lot depends on lockdowns imposed in UK and Europe during second wave of Covid-19.
Bedding & Towels manufacturers are finding it difficult to secure order at large, unless the raw material prices fall in the coming days.