PAKISTAN COTTON MARKET:
Moderate business activity was seen in local cotton market, needful buyers and spinners showed interest in buying of local cotton. Leading buyers were interested in import of cotton. Prices were remained on same levels and no major change was seen due to moderate business activity in local cotton market. The price of good quality cotton was in range of Rs. 8800~9600. KCA remained stable at the level of rs. 9,450/maund.
Due to drastic decrease in the production of cotton, there is a need to take steps on war footings to increase the production of cotton otherwise reliance of textile sector on imported cotton will be increased. Due to the low production of cotton around 22 % ginning factories had not even started their operations while some ginning factories had suspended their operations after starting their operations partially. Over all mixed trend was witnessed in the rate of cotton in international market. The Rate of New York Cotton remained stable. According to the weekly export report of USDA the exports witnessed a decline of 22 % but the Rate of NYCF was not affected with the decline of export.
Economic tensions have rose between the United States and China, but so far China is importing cotton from the United States in good quantity. The business volume in international markets is decreasing due to the threat of second wave of COVID 19. The rate of cotton in Brazil, Argentina and Central Asian states remained a little bit stable but the bearish trend was witnessed in the rate of cotton in India because of the news of increase in the production of cotton. Cotton prices in India during the last week dropped by Rs. 1000 per candy (356 kg).
Seed cotton (Phutti) equivalent to over 4.6 million or exactly 4,648,092 bales have reached ginning factories across the country till Dec 1, 2020, registering a 37.59 per cent shortfall compared to corresponding period of last year when arrivals were recorded well over seven million bales. Cotton arrivals in Punjab were recorded at 2.6 million or 2,634,487 bales while Sindh generated just over 2 million or 2,013,605 bales.
Cotton production has dropped alarmingly this year, especially due to poor pesticide and unfavorable weather conditions and decrease in cultivation area of cotton. To fulfil the demand of local cotton mills 70 lac bales of worth 6 billion dollars will have to be imported. Up till now mills have signed agreements for the import of 33 lac bales and more are in pipe line.
The price of cotton in Sindh is in between Rs. 8600 to Rs 9500 per maund. The price of Phutti in Sindh is in between Rs. 3300 to Rs. 4200 per 40 kg. The price of cotton in Punjab is in between Rs. 8800 to Rs. 9600 per maund. The price of Phutti in Punjab is in between Rs. 3900 to 4800 per 40 kgs. The price of Phutti in Overall prices of cotton were in the range of USC 66~73 Lbs. (8600~9600/ maund).
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 66.00 | 66.00 | 0.00 |
| Highest | 73.00 | 73.00 | 0.00 |
CRUDE OIL:
Crude Oil prices opened at USD 45.34 with slightly low level as compared to last week closing figures.
In this week, crude oil price dropped in next session, while marched upward till closing, so closed on positive side at the end of week.
In last day of the week, Crude Oil price closed at USD 46.26 with increase of USD 0.92 cents as of opening figure of week.
| Opening of Week | Closing Of Week | Change | |
| Price | 45.34 | 46.26 | 0.92 |
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 1.21 and British Pound also closed on positive note with figure 1.34 against USD.
| Selling | Buying | |
| LC Sight | 160.19 | 160.14 |
| LC 120 Days | 159.66 | 159.61 |
| Open Market | 162.26 | 158.55 |
NEW YORK COTTON FUTURE:
New York Cotton futures opened on lower levels on Monday as compare to previous week’s closing figures.
NYCF rose slightly in next session and then dropped in two sessions, hence recovered on closing but still closed on negative side by the end of week.
At last day of the week, MAR 2021 closed at 71.57 with downward of 58 points.
At last day of the week, MAY 2021 closed at 72.45 with drop of 60 point.
At last day of the week, JUL 2021 closed at 73.21 with decrease of 54 point.
PAKISTAN YARN MARKET:
Local yarn market remained stable in term of asking prices and limited business was made in market. Due to good sale of coarse counts in export yarn, prices remained firm but sale in domestic was slow. Most of mills were interested in additional sale but was not willing to reduce prices. Currently max counts are sold for 3rd week of DEC and offering onward deliveries.
PSF prices was increased by Rs.2/kg by IFL in domestic market dated 30th Nov 2020. PTA, MEG prices were stable after declined prices trend of oil in international market but import polyester prices increased for CNF Karachi. For next week, prices are expected to increase Rs.2~3/kg.
Faisalabad trading market was slow in buying and limited trade was made in all counts of cotton yarn. News of Regularity Duty removal by Govt on import yarn put impact for slow trade as well. 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:
| Count | Price US$/Bale |
| 16/1 CD | 470 – 480 |
| 20/1 CD | 485 – 515 |
| 30/1 CD | 545 – 565 |
| 20/1 CM | 555 – 565 |
| 30/1 PC 52:48 | 420 – 440 |
| 40/1 CM | 680 – 700 |
| 60/1 CM | 950 – 970 |
| 80/1 CM | 1215 – 1305 |
EXPORT YARN MARKET:
Export yarn market remained under good business activity in week 49. Customers kept on checking prices and confirmed handsome quantity orders as follows.
On the other side, suppliers are inflexible in prices and kept on increasing prices after every deal. Major reason for this firmness is good demand from china and other regions. Although prices of cotton are firm but due to good demand in yarn, prices of yarn are getting increased.
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 reasonable orders with required prices and deliveries. As deliveries are dragged forward so customers are trying to book orders to avoid further forward deliveries. European customers kept on checking prices for normal as well as specialized yarns. However, order materialization was slow.
| Count | Korea | Hong Kong | Taiwan | Japan |
| 16/1 CD | 480 – 490 | 480 – 490 | 480 – 490 | 480 – 490 |
| 20/1 CD | 500 – 510 | 500 – 510 | 500 – 510 | 500 – 510 |
| 20/1 CM | 555 – 565 | 555 – 565 | 555 – 565 | 555 – 565 |
| 30/1 CD | – | – | – | – |
| 32/1 CD HOS UNWAXED 100% COT. | – | – | – | – |
| 30/1 CM | 575 – 585 | 575 – 585 | 575 – 585 | 575 – 585 |
| 32/1 CM | 595 – 605 | 595 – 605 | 595 – 605 | 595 – 605 |
| 24/2 CD | 565 – 575 | 565 – 575 | 565 – 575 | – |
PAKISTAN FABRIC MARKET:
In local cotton market week started with slow and firm sentiments but after mid of week weavers raised their asking by almost 1%~2% depending on counts for both narrow and wider width fabrics, resutltantly limited trading activity reported in the market.
weavers received limited inquiries during start of the week but after mid of week buyers floated bulk inquiries. Though spinners raised their asking prices so weavers were forced to increase their asking as well therefore order materialization remained limited in the market for both narrow and wider width fabrics.
In current week still buyers are sharing bids approx 4~5% lower than asking prices of the weavers therefore bulk inquires could not be materialized in the market.
In narrow width major weavers are booked till End January’21 whereas they have covered their wider width looms till end February’21 and offering onward deliveries.
Local fabric prices of regular items are as follows:
| Construction | Price US$/YD Ex Mill |
| 20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN | 1.21 – 1.23 |
| 16X12/108X56 63″ 3/1 | 1.31 – 1.33 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 0.99 – 1.01 |
EXPORT FABRIC MARKET:
Flow of inquires was good from Far Eastern markets during the week however order confirmation percentage was lower because customers were targeting lower prices which suppliers were not ready to accept hence limited orders were finalized by Korean, Japan and Chinese customers. Good quantity of inquiry was received from Bangladesh but their targets were 6~8% lower.
Asking prices remained stable and firm due to firmness in yarn prices. Currently good suppliers are booked till mid of Feb and offering end Feb onward deliveries whereas average suppliers are booked till mid ~ end Jan and offering onward deliveries.
Limited inquiries were received from European customers both in narrow and wider width resultant limited buying during the week under review. USA buyers were remained in active as no considerable inquiries were reported.
Wider width suppliers get less inquiries as compared the business activity during last many months. Prices for wider width were also stable due to stable yarn prices. Suppliers are booked till end of Feb and offering March onward deliveries.
| 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 | 1.31 – 1.33 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 1.00 – 1.02 |
GARMENTS:
Garment manufacturers in Pakistan are operating at their full capacity with orders in hand booked in recent past. Dyeing units in garments’ vertical chain are also working in full space and finding it difficult to accommodate new orders and delivery on time. Lead time is being offered ranging from ninety days to hundred and twenty days by the garment manufacturers. Future for garment industry of Pakistan looks quite optimistic considering the development in progress as work has already been started for SS22.
On the global front, the Covid-19 crisis has disturbed the fashion industry and its supply chain. Its impact is expected to remain on industry until 2022 with recovery set to take time. A new report from Global Fashion Agenda suggests that despite encouraging progress and continuous introduction of new initiatives the fashion industry is still far from being sustainable and that is due to global Covid-19 pandemic as a key reason.
Garment manufacturers in Pakistan are operating at their full capacity with orders in hand booked in recent past. Prices are firm due to firm raw material prices and demand from export buyers. Future for garment industry of Pakistan looks quite optimistic considering the development in progress as work has already been started for SS22.
GOING FORWARD:
About future market it is expected that domestic yarn market will be remains stable in prices and yarn prices will follow on raw cotton prices for next season. Further price trends will be according to demand and supply of different counts which will lead price level.
In the local cotton market, moderate business activity was seen, most of the buyers tried to import cotton. In local cotton market prices may remain on same levels because of the slow activity.
Export yarn market remained firm and stable with handsome business activity as suppliers are under comfortable sales position and customers are also accepting increase in prices. so, we might see prices in firm and stable range with increase in days to come.
Local fabric market show firm sentiments in coming weeks with the tendency of moving upward.
Export fabric segment is expected average business in coming days and prices will remain stable. Wider width business is getting slower as compared to last few months activity. Prices for wider width are also expected to remain stable.
Garment manufacturers in Pakistan are operating at their full capacity with orders in hand booked in recent past. Prices are firm due to firm raw material prices and demand from export buyers. Future for garment industry of Pakistan looks quite optimistic considering the development in progress as work has already been started for SS22.
