PAKISTAN COTTON MARKET
In Last week in local cotton market, slow business activity was seen in the local cotton market in earlier days, buyers were expecting that prices may reduce, while on the other hand prices rose internationally, so by the end of week needy textile mills started buying after that bullish trend started prevailing in the market. Then Ginners increased the rates and stop selling cotton. The ginners adopted the policy of wait and see.
In local cotton market, cotton prices were firm at the level of Rs. 11300 per maund. KCA drop Rs.100 and touched the level of rs.10,700/maund. The rate of cotton remained stable and firm, internationally cotton trend was on positive side.
International cotton market remained a little bit bearish in the initial days of the trading during the last week but on Thursday evening after the release of USDA weekly export report the New York Cotton increased. Although, the export volume was 16 % less as compared to the last week report.
American President Joe Biden has hinted to restore reconciliatory policy with China. Meanwhile, China is the biggest buyer of American cotton this week while Pakistan on number three. If both China and USA reached at an agreement the economic situation of both the countries will improve while it has a positive impact on the global economy. However, during the week the rate of cotton remained stable in China, Brazil and Central Asian states while fluctuation was seen in the rates of cotton in India.
Seed cotton (Phutti) equivalent to over 5.5 million or exactly 5, 571,666 bales have reached ginning factories across the country till February 1, 2021, registering a 34.35 per cent shortfall compared to corresponding period of last year when arrivals were recorded over 8.4 million bales. Cotton arrivals in Punjab were recorded at 3.4 million or 3,436,731 bales registering a shortfall of 31.46 pc as compared to corresponding period of last year. Sindh generated just over 2.1 million or 2,134,935 registering a shortfall of 38.53 pc as compared to corresponding period of last year.
The price of cotton in Sindh is in between Rs. 10,200 to Rs. 10,700 per maund. The price of Phutti in Sindh is in between Rs. 4000 to Rs 4700 per 40 kg. The price of cotton in Punjab is in between Rs. 10,300 to Rs. 11,300 per maund. The price of Phutti in Punjab is in between Rs. 4500 to 5300 per 40 kgs. The price of Phutti in Overall prices of cotton were in the range of USC 77~85 Lbs. (10200~11300/ maund).
|Opening Of the Week||Closing Of the Week||Change|
Crude Oil prices opened at USD 53.55 with high level as compared to last week closing figures.
In this week, crude oil prices showed upward trend in this week and closed on positive side at the end of week.
In last day of the week, Crude Oil price closed at USD 56.85 with increase of USD 3.30 cents as of opening figure of week.
|Opening of Week||Closing Of Week||Change|
In last week values of Pak rupee fluctuated 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 negative note with figure of 1.20 and British Pound closed on positive note with figure 1.37 against USD.
|LC 120 Days||159.88||159.83|
NEW YORK COTTON FUTURE
New York Cotton futures opened with slightly higher levels on Monday as compare to previous week’s closing figures.
NYCF showed upward trend in this week and closed on positive side at the end of week.
At last day of the week, MAR 2021 closed at 82.74 with downward of 271 points.
At last day of the week, MAY 2021 closed at 84.02 with drop of 266 point.
At last day of the week, JUL 2021 closed at 84.84 with decrease of 251 point.
PAKISTAN YARN MARKET
Local yarn market remained firm in asking prices because of firm trend of NYCF and good sale was made during this week ended. Suppliers have sold their production till mid-march. Yarn prices in asking remained firm due to short in yarn delivery. On the other hand, buyers covered yarn against their sold orders and were forced to buy as per their need in domestic market as import yarn was also not viable.
PSF prices was increased by Rs.2/kg by IFL in domestic market dated 1st FEB 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 due to gap in demand and supply.
Faisalabad trading market was slow 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 and PV yarn prices was also stable 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||545 – 570|
|20/1 CD||575 – 600|
|30/1 CD||635 – 655|
|20/1 CM||640 – 665|
|30/1 PC 52:48||490 – 520|
|40/1 CM||795 – 820|
|60/1 CM||1095 – 1135|
|80/1 CM||1380 – 1410|
EXPORT YARN MARKET
Export yarn market remained firm and stable with dull business activity as customers were on side line during week 5. Cotton prices in international market kept on fluctuating till mid week. However, mid week onwards, prices showed massive hike which once again pushed yarn prices on higher side.
Suppliers increased their prices immediately after the increase but were interested to discuss bids closed to offered prices. suppliers are quite comfortable as they are booked for 45-50 days. However, Chinese customers are under holiday mood and not showing any interest in fresh buying which kept suppliers quite conscious to place orders.
It is expected that prices may show firm and stable trend in days to come if buying continues. However, it all depends how customers proceed for old orders lcs and new orders decision. If we look at the Chinese customers, they are slow due to upcoming holidays and outbreak of second wave of CCOVID-19 in some parts.
Most of the main customers already left for holidays and business activity is on halt. European customers kept on checking prices for normal as well as specialized yarns. After long silence, they have started sharing bids and also confirmed some business. However, they are still resisting against high asking prices.
|16/1 CD||525 – 535||525 – 535||525 – 535||525 – 535|
|20/1 CD||545 – 555||545 – 555||545 – 555||545 – 555|
|20/1 CM||600 – 610||600 – 610||600 – 610||600 – 610|
|32/1 CD HOS UNWAXED 100% COT.||–||–||–||–|
|30/1 CM||620 – 630||620 – 630||620 – 630||620 – 630|
|32/1 CM||640 – 650||640 – 650||640 – 650||640 – 650|
|10/1 CD SIRO YARN FOR WEAVING||–||–||490 – 500||–|
PAKISTAN FABRIC MARKET
In current week the local fabric market showed firm posture despite slow activity in the market throughout the week for both narrow and wider width fabrics. Once again customers did not float bulk inquiries in the market due to firm yarn and fabric prices.
Flow of inquiries slowed down as buyers are expecting a downward trend in yarn prices. Against limited inquiries weavers booked some orders after tough negotiations at last week inflows.
Still major weavers are reluctant to offer pc and cvc fabric prices owing to increase in pc/cvc yarn prices and also spinners are not ready to keep prices valid for coming days. Currently major weavers are offering narrow width end March onward and offering wider width looms by end April / Early May onward whereas special looms deliveries are available end May onward.
Local fabric prices of regular items are as follows:
|Construction||Price US$/YD Ex Mill|
|20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN||1.40 – 1.42|
|16X12/108X56 63″ 3/1||1.52 – 1.54|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||1.14 – 1.16|
EXPORT FABRIC MARKET
Improved business activity was seen from Far Eastern customers as decent booking was made by the Korean customers however no inquiry was reported from China because of their coming new year holidays. Average business activity was seen from Indonesia, Vietnam and Bangladesh. Most of the customers have realized that prices will remain firm for some weeks as immediate price correction is not possible hence they have taken buying decision.
Asking prices remained stable and firm due to firmness in yarn prices.
Currently good suppliers are booked till end of March and offering early ~ mid April onward deliveries. Average suppliers are booked till mid of March and offering end March onward deliveries.
It is expected that business activity may remain slow in coming week as customers may watch the market sentiment after Chinese New year started. European customers may start buying for their urgent need only. Prices will remain stable.
Number of inquiries were increased by the European customers as most of the inquiries for tender based. Limited buying was noticed from Germany, Italy and Portugal. Most of the European customers are still working from home due to Pandemic Corona Virus.
Due to continuous rise in polyester, spinning units are holding most of their offers for some time thus offering prices for work wear items to the customers are getting delayed.
Wider width suppliers have received decent quantity of order and covered their sales till end of April. They are offering May onward deliveries now a days. Prices for wider width remained stable without change.
Following were the closing rates based on CNF Far Eastern ports:
|Construction||Price US$/YD CNF Far East|
|20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN||1.42 – 1.44|
|16X12/108X56 63″ 3/1||1.53 – 1.55|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||1.16 – 1.18|
BED LINEN & TOWELS
Bedding and Towels market has remained slow due to the high cost of raw materials. Due to cotton shortage and increasing cost of polyester fiber. Lead time of new orders is 90 to 110 days, as of for repeat it is 45 to 50 days.
Production capacities have been increased in the garment industry of Pakistan. Some new dyeing units have been installed. These new erections have been done considering the order inflow into Pakistan and anticipating further demand from the buyers side as US-China rift is also diverting orders to Pakistan. It was reported that value of textile and garment exports from Pakistan rose by 7.79 per cent year-on-year in dollar terms in the first half (H1) of fiscal 2020-21 that began on 1st July.
Overall factories have orders in hand to hit shipments till April’21 and for the new inquiries deliveries are being offered from May onward depending upon the nature of the product and order size. Prices have been firm due to non flexible behavior of raw material prices.
On the global front, UK Fashion industry has approached their Prime Minister to look into the post Brexit scenario as fashion industry is facing challenging time due to the restriction brought in by the post Brexit trade deal with EU. On the other side some global famous brands are insisting to stick to the orders from Myanmar’s suppliers despite the military has taken over the state affairs.
About future market it is expected that yarn prices in domestic market will remains stable and firm due to massive demand and shortage of cotton, firm in NYCF and massive orders of finished product in Pakistan market. Market will re-access after Mid Feb, further price trends will be according to demand and supply of different yarn counts which will lead price level.
In the local cotton market, firm and stable price trend was observed. Business volume was on lower side in start of week but later due to the rose in ICE cotton , buyers took interest in buying. It seems that international market will remain firm in coming days and local market too.
Local fabric market remained slow as customers did not share too much of inquiries anticipating that prices may soft in coming days but the situation is totally different. Prices are getting firm and strong with every passing weak and expected to remain firm for next couple of weeks.
Market remained under slow nominal activity for export yarn due to Chinese new year holidays. European customers showed some activity and placed orders with selected suppliers for normal and specialized items. however, some negotiations are going on and we might see some orders placements in days to come.
Healthy placements with garment factories in Pakistan kept the momentum fast as capacities were found to be increased. Future outlook also looks bright as orders are coming in.
Reduction of raw material cost will give benefit to bedding and towel manufacturers. But this looks bleak.