PAKISTAN COTTON MARKET
In Last week in local cotton market, bullish trend was witnessed because textile mills had taken interest in the buying of good quality cotton in fear that prices may up further in coming days because of firm and upward trend in international market. Ginners also sold cotton in higher prices.
In local cotton market, cotton prices were remained firm at the level of Rs. 11600 per maund. KCA increased Rs.200 and touched the level of Rs.11,000/maund. Price of cotton is increasing in international cotton market and the decrease in the production of cotton at local level is alarming the price of cotton may increase to some extent but up till now chances are very low that price of cotton will decrease.
The big textile groups had signed agreements for the import of cotton from abroad in reasonable price. The demand of cotton and cotton yarn is continuously increasing in local and international markets while export agreements of textile products were signed in large numbers due to which up till now textile sector is in winning position.
Over all bullish trends was witnessed in international cotton market especially significant increase was witnessed in the New York Cotton which after increasing reached at the highest level of 89.41 American cents. The reason behind increasing trend is World Agricultural Supply and Demand Estimate (WASDE) report which shows decrease in cotton production and increase in demand as well as shows decrease in closing stock. It also shows decrease in production of cotton as compared to last year.
Weekly export report of USDA shows an increase of 36 % in exports. This time also China is the biggest importer. Bullish trend was witnessed in the rate of cotton in Brazil, Africa and Central Asian states while significant increase was witnessed in the rate of cotton in India.
Cotton production in the country was lowest in thirty years. The cotton production in the country is 33 % less as compared to last year due to which textile mills are depending on imported cotton. Up till now import agreements of 45 lac bales have been signed and the delivery of the cotton is going on fast track. This year 70 lac bales of cotton will be imported of worth three billion dollars to fulfill the local demand.
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 10,400 to Rs 11,600 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 77~88 Lbs. (10200~11600/ maund).
|Opening Of the Week||Closing Of the Week||Change|
Crude Oil prices opened at USD 57.97 with high level as compared to last week closing figures.
In this week, crude oil prices showed upward trend, hence mid of slightly dropped, but closed on positive side at the end of week.
In last day of the week, Crude Oil price closed at USD 59.47 with increase of USD 1.50 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 positive note with figure of 1.21 and British Pound also closed on positive note with figure 1.39 against USD.
|LC 120 Days||159.05||159.00|
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, hence drop in mid of week rest showed upward trend and closed on positive side at the end of week.
At last day of the week, MAR 2021 closed at 87.27 with upward of 299 points.
At last day of the week, MAY 2021 closed at 88.66 with rose of 306 point.
At last day of the week, JUL 2021 closed at 89.41 with increase of 298 point.
PAKISTAN YARN MARKET
Local yarn market increased in prices after increasing in NYCF during last week ended. Good numbers of sales were also made on fresh rates and suppliers were sold till End-march, and yarn prices in asking remained firm due to short in yarn delivery. On the other hand, buyers were in hurry to covered yarn against their sold orders and were forced to buy as per their need from domestic market as import yarn is still not viable from any region.
PSF prices was increased by Rs.2/kg by IFL in domestic market dated 8th FEB 2020. PTA, MEG prices remained firm and crude oil prices were also jumped up in international market during lasty week and imported polyester CNF prices increased due to massive demand. For next week, prices are expected to increase further Rs.2~3/kg due to gap in demand and supply.
Faisalabad trading market was average in buying and good 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||550 – 580|
|20/1 CD||580 – 605|
|30/1 CD||645 – 680|
|20/1 CM||650 – 690|
|30/1 PC 52:48||500 – 530|
|40/1 CM||810 – 835|
|60/1 CM||1110 – 1140|
|80/1 CM||1395 – 1435|
EXPORT YARN MARKET
Polyester Fibre price is firm at Pak RS 197/Kg. However, it is most likely that prices will increase further on next week due to high imported fibre prices. There has been very good demand for blended yarns in the market which is pushing fibre prices further upward as suppliers are buying fibre on regular basis.
Cotton prices are continuously under bullish sentiment and showing massive increase on daily basis. This has also put impact on domestic cotton prices due to which ginners have increased their prices. As Pakistan is short of cotton by almost 45% so they have no other option but to import cotton even on higher prices to complete their orders. Hence, prices will show continuous surge in days to come. If we look at the international cotton, it has showed an increase of 11% in last 8 working days and future sentiment is still bullish.
PC/CVC Yarn suppliers have sold good quantities in this week as customers have accepted the increase and have placed orders. So, all hope regarding correction in market are losing and it seems market will show further increase in days to come. Suppliers have booking for 60-70 days and they are quite inflexible to negotiate the prices.
Export market is still resisting against sudden change in market. Chinese customers are on holidays and preholiday sentiment was dull. However, they have also started to follow the bullish trend and started to place orders even during their holidays. So, this has given more stability to market and suppliers are getting comfortable with their sales position and increasing price with every single deal is confirmed. European customers were resisting against prices. However, this recent increase in cotton prices have also forced them to confirmed orders in anticipation of further increase. The way market is moving, now chances of correction in market are very less as suppliers are not in mood to discuss any kind of reduction in prices.
|16/1 CD||550 – 560||550 – 560||550 – 560||550 – 560|
|20/1 CD||570 – 580||570 – 580||570 – 580||570 – 580|
|20/1 CM||625 – 635||625 – 635||625 – 635||625 – 635|
|32/1 CD HOS UNWAXED 100% COT.||–||–||–||–|
|30/1 CM||645 – 655||645 – 655||645 – 655||645 – 655|
|32/1 CM||665 – 657||665 – 675||665 – 675||665 – 675|
|10/1 CD SIRO YARN FOR WEAVING||–||–||510 – 520||–|
PAKISTAN FABRIC MARKET
In local fabric market narrow ranges have been prevailing and therefore firm market trend observed in the market throughout the week for both narrow and wider width fabrics.
weavers slightly raised their asking and therefore customers could not float bulk inquiries in the market and resultantly limited business reported in the market at increased prices after tough negotiations.
Major weavers are unable to offer pc and cvc fabric prices due to increase in pc/cvc yarn prices and also spinners are not ready to keep prices valid for next 1-2 days.
Currently major weavers are offering narrow width early~mid-April onward and offering wider width looms by end pril / Early May onward whereas special looms deliveries are available end May onward.
In coming days we still believe that market has the tendency to increase further and therefore suggest to book urgent requirements to avoid further losses.
Local fabric prices of regular items are as follows:
|Construction||Price US$/YD Ex Mill|
|20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN||1.40 – 1.42|
|16X12/108X56 63″ 3/1||1.50 – 1.52|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||1.14 – 1.16|
EXPORT FABRIC MARKET
Since the prices are continuously increasing, it is observed that customers has started thinking seriously to place their order which they were holding hence they have started sharing their target prices. Although these are still 2~3% lower than asking prices but this is healthy sign towards business improvement.
Limited inquiries were received from Far Eastern markets due to the holiday season. Asking prices remained firm due to firm yarn prices.
Currently good suppliers are booked till end of March and offering early ~ mid April onward deliveries whereas average suppliers are booked till mid of March and offering end March ~ early April onward deliveries. Suppliers are enjoying good business after a long time and making good profits due to good demand from Export based as well as domestic based customers.
Good flow of inquiries were received from European customers during the week however limited booking was done at existing prices.
Wider width suppliers are comfortably booked till end of May and offering June deliveries. Limited quantities are available for end May shipments. Prices for wider width fabric also remained firm with tendency to move further upward.
Following were the closing rates based on CNF Far Eastern ports:
|Construction||Price US$/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
In Bedding and Towel market, the manufacturers in Pakistan are disturbed on the rising cost of raw materials, however for the repeat orders the prices are being finalized with exclusion of development charges.
For new orders they are finding it really difficult to meet the expected targets of the customer. Mainly to do with polyester fiber prices going up. Ample of orders are already in the pipeline and for which the demand is firm for raw materials.
Lead times are stretching from 90 to 100 days whereas for repeat orders it is 45 to 60 days.
Garment factories in Pakistan have orders in hand for deliveries till May 2021. Prices have been firm due to firm prices of raw material. Most of the orders have been finalized for FW21 season. Developments for SS22 are in progress.
Overall factories have got healthy booking position to fill their capacities. On average factories have space to offer deliveries from End May onward. Sustainability has been and important element for the factories and garment units have required certifications to offer sustainable products for foreign customers.
About future market it is expected that yarn prices will remains stable and firm due to massive demand and shortage of yarn and raw cotton, firm in NYCF and massive orders of finished product in Pakistan market. Further yarn prices 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. Bullish business volume was seen due to the firm trend by globally and short crop worldwide. It seems that international market will remain firm in coming days and local market too.
Local fabric market has the tendency to increase further and therefore suggest to book urgent requirements to avoid further losses.
It is expected that export yarn prices in PC/CVC and COTTON will remain bullish in days to come according to cotton prices. So, it is suggested to place orders before prices are once again increased and deliveries are dragged forward as well.
Export fabric market is expected to remain average in business however prices will remain firm with tendency to move upward so it is strongly suggested to place orders instead of holding because prices will not slash down in coming weeks.
With the increased demand a healthy wave is expected for garment industry of Pakistan. Prices are firm due to firmness in raw material prices.
Bedding and Towels markets might get into trouble due to the rising cost of raw materials in the coming days and this might affect order bookings for the upcoming seasons.
It is recommended to place orders at current level although seems on higher but it is expected that prices will further increase in days to come.