PAKISTAN COTTON MARKET
In Last week in local cotton market, moderate business activity was seen, buyers showed interest in buying in fear that prices may go up in coming days due to the shortage of crop in this year and upward trend of ICE cotton. Therefore, needy buyers showed interest to maintain their stocks.
In local market, Cotton prices increased around Rs 200 to Rs 400 per maund. KCA also increased rs. 250 and touched the level of Rs. 10,200/maund. Upward movement of ICE cotton futures put its impact on all the leading cotton markets and forced the cotton prices higher.
The bullish trend was witnessed in the rate of New York Cotton under the influence of which bullish trend was witnessed in the traditional cotton producing countries. The demand of polyester fiber is increasing other than cotton. Majority of the mills is producing PC yarn and increase in the rate of polyester fiber is creating difficulties for them.
Increasing trend remained continued in the international cotton markets. The Rate of New York Cotton witnessed bullish trend. The rate reached at the highest level of 78 American cents per pound. Although according to the weekly export report of USDA the export shows a decline of 30 % and the rate of dollar decreased while the rate of cotton is increasing despite Christmas holidays, bank closings and COVID 19.
The rate of cotton is increasing in Brazil, Argentina and Central Asia while the increasing trend in the prices of cotton in India is a little bit more. cotton production in India is expected to be three crore 70 lac bales in 2020-21. Cotton Cooperation of India is giving monetary benefits to the farmers and ginners. The monetary help played a vital role in increasing the production of cotton in India but it is observed that in Pakistan cotton crop was continuously ignored. Positive steps should be taken to increase the production of cotton.
Seed cotton (Phutti) equivalent to over 5.3 million or exactly 5,370,553 bales have reached at ginning factories across the country till Jan 3, 2021, registering a 34.02 per cent shortfall compared to corresponding period of last year when arrivals were recorded over Eight million bales.
The decline in cotton output is a worrying sign for the textile industry particularly spinners as it will also have a partial impact on cotton prices , Textile companies will have to rely more on imports, which carry duties and taxes at the import stage. This will naturally make them less competitive than regional peers.
As per the official statistics, Pakistan’s annual cotton production has fallen from 11.9m bales in FY18 to 9.17m bales in FY20. With annual demand hovering above 15m bales, the textile sector will have to import the raw material. We will have to import at least 10m bales in the current year which will increase the country’s import bill. We could have easily saved this foreign exchange, had the government taken required action.
The price of cotton in Sindh is in between Rs. 9000 to Rs. 10400 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. 10600 per maund. The price of Phutti in Punjab is in between Rs. 4000 to 5400 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 47.62 with low 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 48.52 with increase of USD 0.90 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 1.22 and British Pound also closed on positive note with figure 1.37 against USD.
|LC 120 Days||160.10||160.05|
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 and closed on positive side by the end of week.
At last day of the week, MAR 2021 closed at 78.12 with upward of 177 points.
At last day of the week, MAY 2021 closed at 78.70 with rose of 170 point.
At last day of the week, JUL 2021 closed at 79.17 with increase of 164 point.
PAKISTAN YARN MARKET
Local yarn market remained firm followed by domestic cotton and NYCF. Mills have good sale in hand and suppliers were selling only on their desired prices. Delivery for all yarn counts are short. Buyers were forced to buy on these prices as global market prices gone up.
PSF prices increased by Rs.5/kg by IFL in domestic market dated 28th Dec 2020. PTA, MEG prices were stable after increased 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 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:
|16/1 CD||500 – 515|
|20/1 CD||515 – 540|
|30/1 CD||585 – 615|
|20/1 CM||600 – 625|
|30/1 PC 52:48||445 – 470|
|40/1 CM||730 – 750|
|60/1 CM||1000 – 1030|
|80/1 CM||1305 – 1355|
EXPORT YARN MARKET
Export yarn market remained firm and stable with limited business activity due to holidays in all regions during week 53. Over all suppliers are comfortably booked and not showing any panic in selling. Hence, not flexible in reducing the prices. Only negotiations are done in presence of firm bids form buyers.
Over all Pakistan is short of cotton crop in this season so prices are expected to remain firm and stable with rising trend. It has been witnessed that customers are also digesting market conditions and placing orders with the increase in prices. This has also given sigh of relief that customers are buying with increased price levels.
This also shows that despite of COVID 2nd wave, business has not been effected rather some new developments have been done in market and old customers also started to buy. We might see another wave of buying from customers in the month of January as market is moving in right direction.
Chinese customers remained slow this week due to holidays but limited orders were placed with selected suppliers.
European customers kept on checking prices for normal as well as specialized yarns. However, order materialization was slow due to holidays.
|16/1 CD||520 – 530||520 – 530||520 – 530||520 – 530|
|20/1 CD||540 – 560||540 – 560||540 – 560||540 – 560|
|20/1 CM||595 – 605||595 – 605||595 – 605||595 – 605|
|32/1 CD HOS UNWAXED 100% COT.||–||–||–||–|
|30/1 CM||615 – 625||615 – 625||615 – 625||615 – 625|
|32/1 CM||635 – 645||635 – 645||635 – 645||635 – 645|
|10/1 CD SIRO YARN FOR WEAVING||490 – 500||490 – 500||490 – 500||490 – 500|
PAKISTAN FABRIC MARKET
The local fabric market remained firm throughout the week because local cotton and yarn prices consistently showing upward trend.
Flow of inquiries slowed down due to year end closing. Therefore limited activity was reported in the market for both narrow and wider width fabrics. 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 Feb /early March and in wider width weavers are booked till End of March and offering onward deliveries.
Local fabric prices of regular items are as follows:
|Construction||Price US$/YD Ex Mill|
|20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN||1.26 – 1.28|
|16X12/108X56 63″ 3/1||1.38 – 1.40|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||1.03 – 1.05|
EXPORT FABRIC MARKET
Export fabric Far Eastern markets remained aside of buying due to holiday mood. Few inquires were reported which was for price checking only hence no considerable buying was noticed. Prices were firm due to firmness of raw material prices.
Good suppliers are booked till end of Feb and offering early ~ mid March onward deliveries whereas average suppliers are booked till mid of Feb and offering end Feb onward deliveries.
No considerable business activity was observed from USA and European markets due to Christmas and New Year holidays. Prices for wider width remained firm due to firm fine count yarn prices. Suppliers are booked for next three months thus they are in comfortable sales position.
Following were the closing rates based on CNF Far Eastern ports:
|Construction||Price US$/YD CNF Far East|
|20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN||1.26 – 1.28|
|16X12/108X56 63″ 3/1||1.38 – 1.40|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||1.04 – 1.06|
BED LINEN & TOWELS
Bedding & Towel manufacturers are loaded with orders for the coming months. Raw material prices are still at the higher side, whereas the market is leaping towards increasing their production capacities with the introduction of new technologies and addition of machineries. This will in-turn bring in more orders and put pressure on raw material suppliers to reduce prices for volumetric trade. Production lead times are stretching to over 95 to 110 days.
Due to Christmas, holiday mood prevailed in apparel industry in terms of activity flow. Overall factories are running at their full capacities and have space to offer deliveries with a lead time of ninety days to hundred and twenty days.
While addressing in a ceremony central chairman of Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) said the country has accumulated business worth over $200 million since the 35th International Apparel Federation (IAF) Fashion Convention was held in November 2019 in Lahore.
About future market it is expected that domestic yarn market remains firm due to shortage of cotton, firm in NYCF and good demand and massive orders in Pakistan market. Further price trends will be according to demand and supply of different yarn counts which will lead price level.
In the local cotton market, moderate 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.
Local fabric market remained firm during the week and expected to remain firm in coming days. Flow of inquiries were slow due to end of year closing.
Market remained firm and stable with limited business activity for export yarn market. Major reason for slow orders placements was Christmas and New year holidays due to which customers remained in festive mode. However, next week is expected to remain good in business.
In Export fabric, it is expected that good demand will re-start from Far Eastern, USA and European sectors in days to come and prices may remain firm due to high raw material prices.
In Garment industry, it is expected that foreign customers will start sharing new inquiries by end of this month with some latest developments.
In the coming days, prices of raw materials will decide the fate of bedding and towel manufacturers and order bookings.