PAKISTAN COTTON MARKET:
In Last week, moderate business activity was seen in start of week but later activity improved after the reports that internationally the production of cotton decreased. Needy buyers and spinners showed interest in buying of local cotton. Ginners were stocking good quality cotton because of increase in the rate of cotton due to the low production. They are waiting that when rates will be increased.
The textile mills are steadily buying cotton as per their needs. Big textile groups had signed agreements for the import of cotton in good quantity and there delivery had also started.
The Phutti is continuously arriving. It is estimated that production of cotton this year will be around 55 to 60 lac bales. Local 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. 8800~9650. KCA dropped Rs. 100 and touched the level of Rs. 9,400/maund.
The rate of cotton remained stable. According to the USDA report there is an increase of 45% in the exports while according to World Agricultural Supply and Demand Estimates (WASDE) internationally the production of cotton decreased by 22 lac bales and demand increased by 15 lac bales. Due to this there is an increase in the rate of New York Cotton and under the influence of increase in the rate of New York Cotton bullish trend was witnessed in international markets.
According to the USDA weekly export report exports were increased by 45 % due to which the Rate of New York Cotton after increasing reached at 75.54 American cents which is highest in 20 months. This time Pakistan and China are biggest importers. However, fear of corona decreased to some extent due to which trading volume improved. It is hoped that it will improve further.
According to the USDA World Agricultural Supply and Demand Estimates report the rate of cotton remained stable in Brazil, Argentina and Central Asian states. Fluctuation was seen in the rate of cotton in India. According to the information received from India it is expected that production of cotton will be around 3 crore 70 lac bales while exports will be around 70 lac bales as compared to the last years export of 50 lac bales around 20 lac bales more.
Seed cotton (Phutti) equivalent to over 4.6 million or exactly 4,648,092 bales have reached at 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.
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. 4400 per 40 kg. The price of cotton in Punjab is in between Rs 8800 to Rs. 9650 per maund. The price of Phutti in Punjab is in between Rs 4000 to 5200 per 40 kgs. The price of Phutti in Overall prices of cotton were in the range of USC 66~73 Lbs. (8600~9650/ maund).
|Opening Of the Week||Closing Of the Week||Change|
Crude Oil prices opened at USD 45.76 with low level as compared to last week closing figures.
In this week, crude oil prices showed downward trend and took jump in 2nd last session, later price reduced in last session but still was on positive side at the end of week.
In last day of the week, Crude Oil price closed at USD 46.57 with increase of USD 0.81 cents as of opening figure of week.
|Opening of Week||Closing Of Week||Change|
In last week values of Pak rupee showed fluctuations on both way with minor changes 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 negative note with figure 1.33 against USD.
|LC 120 Days||159.91||159.86|
NEW YORK COTTON FUTURE:
New York Cotton futures opened on higher levels on Monday as compare to previous week’s closing figures.
NYCF dropped in next session, later rose in two sessions, hence dropped slightly on closing but closed on positive side by the end of week.
At last day of the week, MAR 2021 closed at 74.08 with upward of 170 points.
At last day of the week, MAY 2021 closed at 74.89 with rose of 163 point.
At last day of the week, JUL 2021 closed at 75.54 with increase of 152 point.
PAKISTAN YARN MARKET:
Local yarn market remained stable in start of this week and increase by end of this week. Due to massive sale of coarse counts in export yarn, asking prices of mills were increased however the sale in domestic market was also observed. Most of weavers covered their yarn requirement keeping in Global price comparisons which force them to buy. Currently max counts are sold for end DEC to early Jan 2021 and offering onward deliveries.
PSF prices was increased by Rs.3/kg by IFL in domestic market dated 7th Dec 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 further Rs.2~3/kg.
Faisalabad trading market was average in buying and limited trade was made in all counts of cotton yarn. Fine counts demand was there and good sale was made during last week ended. 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||490 – 515|
|30/1 CD||550 – 575|
|20/1 CM||555 – 580|
|30/1 PC 52:48||420 – 440|
|40/1 CM||680 – 705|
|60/1 CM||950 – 980|
|80/1 CM||1215 – 1305|
EXPORT YARN MARKET:
Export yarn market remained under good business activity in week 50. Customers floated good numbers of enquiries and confirmed handsome quantity orders as well. On the other side, suppliers are firm in prices and kept on increasing prices after every deal.
Major reason for this firmness is good demand from china and other regions. Cotton prices in international market showed upward trend & at the same way, due to good demand in yarn, prices of yarn is 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 placing orders as they have confirmed reasonable quantities 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.
|16/1 CD||490 – 500||490 – 500||490 – 500||490 – 500|
|20/1 CD||510 – 520||510 – 520||510 – 520||510 – 520|
|20/1 CM||565 – 575||565 – 575||565 – 575||565 – 575|
|32/1 CD HOS UNWAXED 100% COT.||–||–||–||–|
|30/1 CM||585 – 595||585 – 595||585 – 595||585 – 595|
|32/1 CM||605 – 615||605 – 615||605 – 615||605 – 615|
|10/1 CD SIRO YARN FOR WEAVING||470 – 480||470 – 480||470 – 480||470 – 480|
PAKISTAN FABRIC MARKET:
In current week under review the local fabric market remained slow but firm sentiments reported with tendency to move upward for both narrow and wider width fabrics.
Limited trading activity was reported in the market as flow of inquiries slowed down as compared to last week. Weaver increased their asking prices towards the end of the week and resultantly orders materialization remained limited in the market for both narrow and wider width fabrics.
Buyers are still sharing their bids approx 4~5% lower than asking prices of the weavers therefore bulk inquiries could not be materialized in the market.
In narrow width major weavers are booked till End January’21 and wider width looms are booked till end February’21/early March’21 and offering onward deliveries.
Local fabric prices of regular items are as follows:
|Construction||Price US$/YD Ex Mill|
|20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN||1.22 – 1.24|
|16X12/108X56 63″ 3/1||1.33 – 1.35|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||1.00 – 1.02|
EXPORT FABRIC MARKET:
Slow business activity was seen during the week from Far Eastern markets. Only few orders were placed by Korea and China towards end of the week only. Limited inquiries were exchanged by Bangladesh and Japan but most of them were only for price checking. Generally demand is slow in Far Eastern markets due to Covid critical situation.
Asking prices for the fabric remained stable with firmness due to firmness in raw material prices.
Currently good suppliers are booked till end of and offering early March onward shipment. Few suppliers are offering end Feb shipments.
Less demand was observed from European and USA markets as most of the European countries have serious problem of COVOD-19. Most of the customers have too much of stocks and their buying capacity reduced up to 50% hence limited inquiries were received from the customers.
Wider width suppliers could not extend their sales during last couple of weeks due to less number of inquiries.
Prices for wider width remain stable. Suppliers have booked till mid of March and offering end March onward deliveries.
Following were the closing rates based on CNF Far Eastern ports:
|Construction||Price US$/YD CNF Far East|
|20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN||1.20 – 1.22|
|16X12/108X56 63″ 3/1||1.31 – 1.33|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||1.00 – 1.02|
BED LINEN & TOWELS:
Bedding and Towels manufactures functioning with their maximum capacity and looms are booked till mid-February 2021. Business activity this week was comparatively slow to moderate due to major buying done by buyers for Christmas and New Year in September. Only the buying of regular orders has been done. Factories are not ready to reduce any prices in goods as prices of cotton and yarn still firm and prices of local polyester has increased in last week. However, factories are ready to negotiate for coming year orders.
As most of the countries are imposing lock down which impact slow business activity in market. We are expecting good flow of inquiries and orders in coming year as soon as holidays season is off and buyer will start buying for summer bookings once they are back from holidays, hopefully by mid-January 2021.
Pakistan’s garment industry is going through its all time healthy phase. The volume in US imports kept its upward trajectory and volumes increases as retailers continued to recover from Pandemic lock down and began to stock up for the holiday season. A number of the world’s renowned apparel brands have shifted their orders to Pakistan. It was reported that Hanes, Guess, Hugo Boss & Target have shifted orders from China to Pakistan in recent past. The trend is positive and hope that it will continue and garment sector can capitalize this opportunity. Factories have space to offer shipments with a lead time starting from end March and onward for the new inquiries.
About future market it is expected that domestic yarn market will be remains firm in yarn prices and it will followed by 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. Due to the shortage of cotton internationally, price may go up in coming days.
Export yarn market showed upward trend 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 will behave with firm posture with tendency to move further up.
Export fabric is expected that business activity may remain slow in coming weeks however prices will remain firm as there is no indication for drop down the prices. Limited inquires are expected from European markets due to bad COVID-19 situation.
Most of the world’s famous apparel brands have shifted their orders to Pakistan and it is likely that business placements will continue to grow in future for apparel sector.
For Home Textile, we are hoping for the prices to drop with settlement of many factors after new year holidays and with supply side stabilizing and deliveries easing out the order turnaround will be good.