PAKISTAN COTTON MARKET
Last week in local cotton market, bearish business trend prevailed and most of the buyers were totally away from current buying due to the drastic drop in international prices. Escalation of economic conflict between China and the United States was one of the main reasons behind fluctuation in the international cotton markets. One of the main reasons for the sharp decline in exports compared to last week is that China is still not interested in importing cotton from the United States.
The prices of cotton in local market witnessed a significant decline of Rs 300 per maund under the influence of an extraordinary bearish trend in international cotton markets. The rate reached at the lowest level of Rs 11,900 per maund from Rs 12,200 per maund. KCA closed at the level of 11900\maund by the end of week with drop of rs.300.
Main reasons for the sharp decline in exports compared to last week is that China is still not interested in importing cotton from the United States. This is creating a crisis because increasing of four cent a day and decreasing of four cent a day, this fluctuation is very dangerous. There is no idea where the market can go. That is why the crisis in business is growing. Under the influence of New York bearish trend prevails in the international cotton markets. Due to this, the cotton business is becoming difficult all over the world. At the moment, there is no such chance of an immediate boom in the market.
In the New York Cotton Market for May reached from 84 US cents to 95 cents. At that time people thought that it will reach one dollar five cents but the rate after decreasing reached at 85 cent to 86 cent and at once reached at 77 cent but on the last day due to profit tacking closed at 79 cent for the month of May.
The price of cotton in Sindh is in between Rs 10,800 to Rs 11,800 per maund. The price of Phutti in Sindh is in between Rs 5000 to Rs 5300 per 40 kg. The price of cotton in Punjab is in between Rs 11,500 to Rs 12,200 per maund. The price of Phutti in Punjab is in between Rs 4800 to 6000 per 40 kgs. The price of Phutti in Overall prices of cotton were in the range of USC 85~96 Lbs. (10800~12200/ maund).
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 90.00 | 90.00 | 0.00 |
| Highest | 98.00 | 98.00 | 0.00 |
CRUDE OIL
Crude Oil prices opened at USD 61.56 with slightly higher level as compared to last week closing figures.
In this week, crude oil prices showed mix trend and closed on negative side at the end of week.
In last day of the week, Crude Oil price closed at USD 60.97 with decrease of USD 0.59 cents as of opening figure of week.
| Opening of Week | Closing Of Week | Change | |
| Price | 61.56 | 60.97 | -0.59 |
EXCHANGE RATE
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 negative note with figure of 1.18 and British Pound also closed on negative note with figure 1.38 against USD.
| Selling | Buying | |
| LC Sight | 155.02 | 154.97 |
| LC 120 Days | 154.67 | 154.62 |
| Open Market | 157.06 | 153.45 |
NEW YORK COTTON FUTURE
New York Cotton futures opened with lower levels on Monday as compare to previous week’s closing figures.
NYCF showed downward trend in this week, only rose on last session but still closed on negative side at the end of week.
At last day of the week, MAY 2021 closed at 80.38 with downward of 424 points.
At last day of the week, JUL 2021 closed at 81.41 with drop of 420 point.
At last day of the week, OCT 2021 closed at 79.49 with decrease of 359 point.
LIVER POOL INDICES
Liverpool Index A was opened at 91.25 with lower level from previous week’s closing figure.
In this week Index “A” showed downward sentiment and closed on negative side by then end of week.
At last day of the week, LPI “A” closed at 88.50 with the decrease of 275 points.
| Opening of the Week | Closing of the Week | Change | |
| Index A | 91.25 | 88.50 | 2.75 |
| Index B | 0.00 | 0.00 | 0.00 |
PAKISTAN YARN MARKET
Soft price trend in Local Yarn market was seen this week. A downward graph of running counts can be credited to the drop in NYCF. However, PSF prices remained more or less the same despite a drop in crude oil by almost $5. Similarly, Faisalabad trading market also experienced a decline due to decreasing demand. All this effect was inevitable after an abnormal upward trend in market. More correction is foreseeable in coming weeks.
| Count | Price in Pak Rupees / 10 LBS | Price US$/Bale |
| 16/1 CD | 2286 – 2364 | 590 – 610 |
| 20/1 CD | 2364 – 2461 | 610 – 635 |
| 30/1 CD | 2732 – 2868 | 705 – 740 |
| 20/1 CM | 2790 – 2868 | 720 – 740 |
| 30/1 PC 52:48 | 2093 – 2325 | 540 – 600 |
| 40/1 CM | 3429 – 3584 | 885 – 925 |
| 60/1 CM | 4766 – 4941 | 1230 – 1275 |
| 80/1 CM | 5968 – 6181 | 1540 – 1595 |
EXPORT YARN MARKET
Export yarn market remained under sluggish business activity as customers remained silent and didn’t show any business activity. Very limited numbers of enquiries were floated against which orders confirmations remained dull and slow. Prices is continuously on decline and every day, we are seeing a drop in prices.
In recent 2 weeks, market showed a handsome dip due to slash in cotton prices internationally. However, Pakistan and Indian cotton remained firm and didn’t show much drop. If we analyze the situation, mainly the trouble happened due to another phased of trade war between US-China which has put pressure over all commodities. This may lead to another halt of business for couple of weeks before things get settled as per market conditions.
At the same time, customers from China and other Far Eastern countries are in silent mode and expecting further decline in prices. This is not a good sign for suppliers as they have sold huge quantities at quite higher levels and this decline in prices will put their orders in trouble.
European customers showed improved business activity as they were not following the drastic increase of prices and were on wait and see mode.
| Count | USD / Bale |
| 16/1 CD | 590 – 600 |
| 20/1 CD | 600 – 610 |
| 20/1 CM | 640 – 650 |
| 16/1 CM | 630 – 640 |
| 20/2 CD | 615 – 625 |
| 24/2 CD | 645 – 655 |
| 10/1 CD SIRO YARN FOR WEAVING | 475 – 490 |
PAKISTAN FABRIC MARKET
Soft market trend was noticed during the week due to soft cotton price in International markets. Fabric suppliers have reduced their prices around 2~3% further during this week due to which good business activity was seen towards end of the week as dyeing units have placed their bulk orders.
Considering low market sentiment, customers are discussing new orders with further reduction of 2~3% which are not possible at the moment however it may be workable in coming week due to correction in prices. Currently suppliers are booked till mid of May and offering end May onward deliveries whereas wider width suppliers are offering end June deliveries. It is expected that prices may remain soft in coming days and business activity will remain average.
| Construction | Price US$/YD Ex Mill |
| 20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN | 1.50 – 1.52 |
| 16X12/108X56 63″ 3/1 | 1.62 – 1.64 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 1.24 – 1.26 |
EXPORT FABRIC MARKET
Another week went with stable prices after continuous rise during last couple of months. Far eastern customers are holding their orders until the market get stable. They are expecting further price reduction in coming days however spinning units are resisting on the prices hence they are not reducing their prices according to the actual market situation.
Yarn prices further reduced about 6~8% during the week and fabric prices also reduced about 2%. The fabric price reduction would have been much more but it keep little strengthen due to appreciation of local currency against US dollar which is about 2~3% during last two weeks.
Currently good suppliers are booked till end of May and offering mid June onward deliveries whereas average suppliers are booked till mid of May and offering end May onward deliveries.
European customers have taken advantage of soft market sentiment and placed their orders with their selected suppliers. USA buyers are holding their orders for some time as they are wait in see mode.
Wider width supplier have good orders in hand till end of June hence they are offering July onward deliveries.
Fine count yarn prices reduced by 4~5% during the week which softened fabric prices as well.
Following were the closing rates based on CNF Far Eastern ports:
| Construction | Price US$/YD CNF Far East |
| 20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN | 1.50 – 1.52 |
| 16X12/108X56 63″ 3/1 | 1.63 – 1.65 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 1.24 – 1.26 |
BED LINEN & TOWELS
Bedding and Towel manufactures are happy on the cotton prices crashing, giving them immense cushion towards strengthening of the Pak rupee against the Dollar. It’s been a tough marathon in winning orders at higher raw material prices in previous months.
Lead times vary with new orders at 75 to 90 days and repeat orders at 45 to 50 working days.
GARMENTS
With the increased demand of garments from both UK and US markets, Pakistani garment factories have been quite busy in working and negotiating new orders. According to National Council of Textile Organization’s re-elected chairman in United States, Textile industry in US is setting its pace to business return as orders continue to bounce back with rising consumer demand and retail sales. This will have direct impact on orders placement with garment manufacturers in Pakistan. Factories’ lead time is stretching from ninety days to hundred and twenty days from order confirmation. For repeat orders delivery can be managed from seventy to eighty days even.
GOING FORWARD
Local yarn prices remained soft during the week by following international price trend. Despite of drop of $5/barrel of crude oil prices, polyester prices remained stable at Rs. 220/Kg. It is expected that yarn prices will remain soft in coming days as well.
In the local cotton market, buyers didn’t show interest and remained in wait and watch mood due to the global trend which was on lower side. It seems that buyers will remain away from buying. There is no idea where the market can go. That is why the crisis in business is growing.
In Local fabric, it is expected that prices may remain soft in coming days and business activity will remain average.
In Export yarn market showed dull and slow sentiment as continuous drop in cotton prices has created uncertainty amongst all suppliers and customers. We might see another wave of slow business activity in the month of April before market to get settled at logical price levels.
Export fabric based suppliers have their opinion that current week and next weeks are very important to understand market direction. Business activity will pick up when prices touch the bottom level and get firm again which may take 2~3 weeks max.
For the Garment industry, with increased consumer demand from two main markets i.e EU and US order influx in Pakistan continue to rise. Lead time is stretching from ninety days to hundred and twenty days on average.
Home textile inquiries are expected to increase in the comings day thanks to sharp drop in the prices.
