PAKISTAN COTTON MARKET:
In Last week in local cotton market, business volume increased and buyers showed interest in fear that prices may go up in coming days. On the other hand, ginners were not interested to sale in expectation of more profit margins in coming days.
Due to the increase in volume, the rate of cotton increased in the local market around Rs. 600 to Rs. 700 per maund. KCA dropped Rs. 350 and touched the level of Rs. 9,850/maund. The reason behind massive increase in the rate of cotton is increase of prices of cotton internationally especially the rate of cotton in New York Cotton Market increased by 6~8 cents during the last two weeks. The major reason behind this increase in prices is increase in the exports of American cotton under the influence of which the rate of cotton in other countries also increased.
Its second time that the price of cotton reached at the highest level of Rs. 10,300 per maund. If the demand increased the rate of cotton may cross Rs. 10,500 per maund which will be highest in season.
The textile mills will have to import 7 million bales of cotton of worth 6 billion dollars to fulfil its needs. Up till now agreements for the import of 3.8 million bales were signed. Other than cotton Phutti arrived from Afghanistan. Next year Afghan cotton will be cultivated in Pakistan.
Significant increase was witnessed in prices of cotton in international market especially under the influence of significant increase in New York Cotton. USDA weekly export report second time shows an overall increase of exports 400,000 bales of cotton. This time too China is on the top of the list by importing more than 200,000 bales while Pakistan was the second biggest importer by importing more than 93000 bales.
In fact, hefty increase was witnessed in the price of New York Cotton because last week’s USDA’s export report shows an increase of 22% in exports and production report of World Agricultural Supply and Demand Estimates (WASDE) showed a decline of more than 2.2 million in the production of cotton worldwide while 15% increase in demand while showed a significant decline in closing stock.
Increasing trend remained continued in the rate of cotton in Brazil, Argentina and Central Asian states while especially the rate of cotton in India increased by Rs. 2600 per candy (356 kg) which reached at the highest level of Rs. 42,500 per candy while it is hinted that rate may increase further.
Cotton production in the country witnessed an alarming decline of 2.8 million bales, according to a report released by Pakistan Cotton Ginners Association. The report says that more than 5 million bales were produced in the
country which is 35.67 percent less as compared to more than 7 million bales produced till December 15 last year.
In Punjab 2.9 million bales were produced which is 1.4 million bales less as compared to the last years production of 4.4 million bales. In Sindh 2.8 million bales were produced which is 1.3 million bales less than the last years production. District Sanghar of Sindh is on top of the list by producing more than 789,000 bales while district Bahawalpur is second by producing 783,000 bales. Seed cotton (Phutti) equivalent to over 5.0 million or exactly 5,057,424 bales have reached ginning factories across the country till Dec 18, 2020, registering a 35.67 per cent shortfall compared to corresponding period of last year when arrivals were recorded well over seven million bales.
The price of cotton in Sindh is in between Rs. 9,000 to Rs. 10,000 per maund. The price of Phutti in Sindh is in between Rs 3600 to Rs. 4800 per 40 kg. The price of cotton in Punjab is in between Rs. 9300 to Rs 10300 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 | |
| Lowest | 66.00 | 68.00 | 2.00 |
| Highest | 73.00 | 76.00 | 3.00 |
CRUDE OIL:
Crude Oil prices opened at USD 46.99 with high level as compared to last week closing figures.
In this week, crude oil prices showed upward trend in this week and closed positive side at the end of week.
In last day of the week, Crude Oil price closed at USD 49.10 with increase of USD 2.11 cents as of opening figure of week.
| Opening of Week | Closing Of Week | Change | |
| Price | 46.99 | 49.10 | 2.11 |
EXCHANGE RATE:
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 1.22 and British Pound also closed on positive note with figure 1.34 against USD.
| Selling | Buying | |
| LC Sight | 160.20 | 160.15 |
| LC 120 Days | 160.01 | 159.96 |
| Open Market | 162.21 | 158.50 |
NEW YORK COTTON FUTURE:
New York Cotton futures opened on higher levels on Monday as compare to previous week’s closing figures.
NYCF marched upward in this week, while dropped slightly on closing, hence closed on positive side by the end of week.
At last day of the week, MAR 2021 closed at 77.16 with upward of 249 points.
At last day of the week, MAY 2021 closed at 77.83 with rose of 232 point.
At last day of the week, JUL 2021 closed at 78.73 with increase of 218 point.
PAKISTAN YARN MARKET:
Local yarn market jumped up in asking by 3~4% of prices during last week ended. Major reason was good export yarn sale toward china coarse counts which was reason to increase prices in domestic market. On the other hand, buyers were force to buying from domestic market as regional yarn prices was also high as import parity. Currently mills are sold for one month and offering onward deliveries.
PSF prices was increased by Rs.3/kg by IFL in domestic market dated 14th 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.3~5/kg further.
Faisalabad trading market was active in buying and good trade was made in all counts of cotton yarn. Fine counts demand was increased and good sale was made during last week ended. Blended yarn and PV yarn prices was also increased and good 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 | 490 – 510 |
| 20/1 CD | 510 – 535 |
| 30/1 CD | 565 – 590 |
| 20/1 CM | 575 – 600 |
| 30/1 PC 52:48 | 440 – 465 |
| 40/1 CM | 705 – 730 |
| 60/1 CM | 980 – 1005 |
| 80/1 CM | 1250 – 1310 |
EXPORT YARN MARKET:
Export yarn market showed handsome business activity with upward trend in prices during week 51.
Customers floated good numbers of enquiries and confirmed reasonable quantity orders as well.
On the other side, suppliers are increasing their prices after every order and trying to get better price than previous booked price.
At the same time, customers responded to increased prices well and have placed orders with better prices.
We might see firm sentiment in days to come with tendency to increase further.
Major reason for this firmness is good demand from china and other regions. Cotton prices in international showed upward trend which also pushed local cotton prices upward as well and touched the highest level in last 04 years hence, we might see market moving only on the basis of demand and supply.
Chinese customers kept on confirming orders as they have booked healthy 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.
| Count | Korea | HongKong | Taiwan | Japan |
| 16/1 CD | 500 – 510 | 500 – 510 | 500 – 510 | 500 – 510 |
| 20/1 CD | 520 – 530 | 520 – 530 | 520 – 530 | 520 – 530 |
| 20/1 CM | 575 – 585 | 575 – 585 | 575 – 585 | 575 – 585 |
| 30/1 CD | – | – | – | – |
| 32/1 CD HOS UNWAXED 100% COT. | – | – | – | – |
| 30/1 CM | 595 – 605 | 595 – 605 | 595 – 605 | 595 – 605 |
| 32/1 CM | 615 – 625 | 615 – 625 | 615 – 625 | 615 – 625 |
| China | ||||
| 10/1 CD SIRO YARN FOR WEAVING | 480 – 490 |
PAKISTAN FABRIC MARKET:
The local fabric market blowup hot in current week for both narrow and wider width fabrics and prices kept on rising in current week.
Due to high uncertainty of yarn market; weavers stopped offering in last two working days so week closed with limited trading activity and almost 3-4% prices increased which forced the buyer to hold their booking.
weaver increased their asking prices by 3-4% and resultantly orders materialization remained limited in the market for both narrow and wider width fabrics.
In narrow width major weavers are booked till early Feb ~ mid Feb’21 and wider width looms are booked till end March’21 and offering onward deliveries. Moving forward we expect the market to remain highly uncertain and cautious approach is recommended at current levels.
Local fabric prices of regular items are as follows.
| Construction | Price US$/YD ExMill |
| 20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN | 1.24 – 1.26 |
| 16X12/108X56 63″ 3/1 | 1.35 – 1.37 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 1.02 – 1.04 |
EXPORT FABRIC MARKET:
The week started with slow business activity from Far Eastern sector but it picked up after mid of the week because of rapid increase in prices. Customers from Korea, Japan and Bangladesh has booked good quantity of orders with increase market prices and did not wait further to avoid further increase in prices.
Yarn prices are continuously increasing due to good demand hence fabric prices also jumped up by 3~4% out of which customers accepted 2~3% increase. Slow demand was witnessed from China, Vietnam, Sri Lanka, Indonesia and Thailand as no considerable inquiries were reported.
Good suppliers are booked till end of Feb and offering early ~ Mid March onward deliveries whereas average suppliers are booked till mid of Feb and offering end Feb onward deliveries only for 2/1, 3/1 and 4/1 orders because 1/1 orders delivery is from End March onward.
Limited inquiries were received from European markets however the flow of inquiries were increased towards end of the week anticipating further increase in prices hence good orders were booked mainly from Germany and Italian customers. Other sectors like France, Portugal and Belgium remained slow during the week.
Wider width business activty was good hence suppliers have further extended their sales till end of March and now offering April onward deliveries. USA market was quite as no considerable business activity was seen.
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 | 1.24 – 1.26 |
| 16X12/108X56 63″ 3/1 | 1.34 – 1.36 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 1.02 – 1.04 |
BED LINEN & TOWELS:
Bedding and Towels manufactures functioning with their maximum capacity and looms are booked till end-Feb 2021. Observed slow activity in this week as buyers has already done with their major buying for New Year / Christmas in October. Buyers are throwing only serious or urgent orders in the market. However, routine orders are in flow. As prices of cotton and local polyester showing upward trend, also expected increase in coming week due to which factories are not ready to reduce prices even the factories has reduced price validity time due to fluctuations in price trends.
There is a mix trend in market as some countries again imposing strict lockdowns and some are lifting back their lockdowns and coming back to normal routines. So we are expecting good flow of inquiries in coming year. As holidays season has started so as soon as they rejoin then they will start buying for upcoming summer bookings 2021.
GARMENTS:
Pakistan Garment Industry has observed a holiday mood in terms of order finalization from export buyers prior to New Year and Christmas Holidays. Limited number of inquiries were floated. At the same time factories were running at their full capacities for the orders already in hand. Lead time is being offered form ninety days to hundred and twenty days. Amongst the items fashion articles are the most affected area due to Covid-19 scenario. Globally fashion industry is suffering as consumers are not spending much on these kind of items. It was reported that online retail in UK and Europe has been active and consumers kept themselves indulged in buying for Christmas. It is expected that customers will place bulk orders during early next year for the developments are already in progress.
GOING FORWARD:
About future market it is expected that domestic yarn market will remains firm for upcoming weeks. Yarn prices are dependent on raw cotton prices which is short in QTY and expected to remains firm in prices. Further price trends will be according to demand and supply of different yarn counts which will lead price level.
In the local cotton market, bullish business trend was seen, prices are increased locally and internationally. It seems that prices may increase further in coming days due to the shortage of crop worldwide. USDA export report shows as increase of 22% in exports and production report of World Agricultural Supply and demand estimates a decline of more than 2.2 million bales of cotton while 15% increase in demand which is also major factor of increase in prices.
Market remained under bullish sentiment for export yarn due to hike in cotton prices in international and domestic market. At the same time, handsome demand from customer kept suppliers firm with upward trend. We might see further hike in price in days to come.
Local fabric market is expected to remain highly uncertain and cautious approach is recommended at current levels.
Good business activity was observed during the week for Export Fabric market and expected to have good business in coming days however prices will remain firm with tendency of upward due to increase of yarn prices.
For Home Textile, sentiments are firm, we are not seeing any drop in prices due to fluctuation in cotton and polyester. But hoping to get orders from customers once they return back from their Christmas holidays.
Holiday mood was observed from export buyers in Garment Industry of Pakistan in terms of order finalization. It is expected that bulk orders will be placed during early next year for the developments are already in progress.
In fact, hefty increase was witnessed in the price of New York Cotton because last week’s USDA’s export report shows an increase of 22% in exports and production report of World Agricultural Supply and Demand Estimates (WASDE) showed a decline of more than 2.2 million in the production of cotton worldwide while 15% increase in demand while showed a significant decline in closing stock.
