PAKISTAN COTTON MARKET
During the last week, activity remained slow in the local cotton market due to the less availability of quality cotton and higher asking prices by ginners. Only small mills that are in need have seen buying as per their current requirements.
In the local cotton market, prices rose further due to the shortage of cotton and the current crop season is practically finished. So, ginners increased their asking for quality cotton. On the other hand, international cotton prices showed a firm trend with both-way fluctuations. Despite rising and firm trends in prices, buyers are taking positions on current market prices. KCA also rose 300 Rs. per maund and reached the level of 20200 per maund. The local cotton market prices were between Rs 19500 ~20,700 per maund.
New-season will be started following five months but it is expected that the stock of cotton will be over in the month of February. There will be a problem for small mills and they will have to look for other options for fulfilling their needs. However, due to the increase in the rate of cotton, there is an issue of parity between the rate of cotton and cotton yarn. Many big groups had bought cotton at better rates and now they are selling it at higher rates.
It is hoped that in the new season farmers of cotton will take interest in expanding the production of this crop. It is expected that the growing area of cotton in Sindh will be increased due to which it is expected that the partial arrival of Phutti will be started by the end of May. However, the supply of quality seeds and pesticides are important factors that play an important role in expanding the production of cotton.
New York Cotton reached 126 American cents per pound after fluctuation. According to weekly USDA sales and export reports, more than one lac eighty-five thousand bales were sold. China was number one after buying one lac eight hundred bales; Pakistan was on the second number with more than twenty thousand and six hundred bales while Vietnam was on number third after buying more than fourteen thousand bales.
The rate of cotton in Brazil, Central Asia, and Africa remained stable. In India rates of cotton witnessed a significant increase after the production of cotton in India decreased by twelve lac bales as compared to initial estimates and due to an increase of demand by ten lac bales. The rate of Shankar 6 quality cotton reached Rupees seventy-nine thousand and two hundred per candy (356 Kg) after increasing in prices.
The price of cotton in Sindh was between Rs 19,500 to Rs 20,000 per maund while Phutti is almost finished. The price of cotton in Punjab was between Rs 19,700 to Rs 20,700 per maund.
The price of Phutti was in the range of USC 1.35~1.43 Lbs. (19,500~20,700/ maund).
|Opening Of The Week||Closing Off the Week||Change|
Crude Oil prices opened at USD 91.32 with a lower level when contrasted with last week’s end figures.
In this week, crude oil dropped in the next session, consequently later showed an upward trend till closing and locked on the higher side by the end of the week.
On the last day of the week, Crude Oil costs shut at USD 93.10 with an expansion of USD 1.78 cents as of the initial figure of the week.
|Opening of Week||Closing Of Week||Change|
Last week values of the Pak rupee marginally depreciated against the US Dollar’s, other significant currencies showed mixed trends in both Interbank and open markets.
Toward the week’s end, Euro closed on a negative note with a figure of 1.13 and the British Pound additionally closed on a negative note with a figure of 1.35 against the USD.
|LC 120 Days||173.94||173.89|
NEW YORK COTTON FUTURE
New York Cotton futures opened with lower levels on Monday as compared with the earlier week’s end figures.
NYCF rose on the following day and later showed a downward trend till closing, henceforth closed on the negative side by the end of the week.
On the last day of the week, MAR 2022 closed at 125.28 with a downward of 29 points.
On the last day of the week, MAY 2022 closed at 122.91 with a drop of 9 points.
On the last day of the week, JUL 2022 closed at 120.12 with a decrease of 17 points.
LIVER POOL INDICES
Liverpool Index A was opened at 141.50 with a higher level than the previous week’s closing figure.
In this week Index “A” showed a downward trend, subsequently took a leap in the second last session however dropped again on closing and closed lower by the end of the week.
On the last day of the week, LPI “A” closed at 140.40 with a decrease of 110 points.
|Opening of the Week||Closing of the Week||Change|
PAKISTAN YARN MARKET
The local yarn market remained firm in asking prices and limited business made was noticed in these price levels. Suppliers were in a consistent position, due to rigid prices of raw cotton in the Global market followed by NYCF. On the other hand, weavers were forced to buy on these price levels as no chance to drop the market in the shortcoming period and they need to procure yarn to feed their looms.
PSF prices remained stable in the domestic market during the last week ended. PTA, MEG prices were firm in the international market and crude oil prices also stayed constant by end of this week. For next week, prices are expected to remain strong or stable.
Faisalabad trading market was again slow and limited activity was seen. Traders were in selling their stocks and loom owners were in a tough position in yarn buying due to a surge in electricity and others overheads. Fine counts demand was the normal and deliberate sale of PV/Viscose reported instead of increased raw fiber prices.
|Count||Price in Pak Rupees / 10 LBS||Price US$/Bale|
|16/1 CD||3059 – 3190||700 – 730|
|20/1 CD||3103 – 3321||710 – 760|
|30/1 CD||3452 – 3649||790 – 835|
|20/1 CM||3714 – 3824||850 – 875|
|30/1 PC 52:48||2556 – 2971||585 – 680|
|40/1 CM||4282 – 4370||980 – 1000|
|60/1 CM||5987 – 6096||1370 – 1395|
|80/1 CM||8477 – 8761||1940 – 2005|
EXPORT YARN MARKET
Export yarn market remained firm with good business activity. Customers from all regions remained active and floated considerable inquiries. After silence in the last couple of weeks, this week customers have placed orders with increased prices.
If we analyze overall market conditions, it is quite visible that due to the upward trend in cotton prices in domestic & international markets, Yarn prices are continuously on the rise. It will not be wrong to say that market will remain stable in the current range with a tendency to increase further.
Moreover, suppliers are quite firm in asking their prices and do not show any flexibility to reduce their offers. They show their interest only in presence of firm bids to conclude orders.
At the same time, due to high cotton prices, suppliers are shifting their productions to finer counts so that they can use existing cotton for a longer time. currently, all counts are either coarse/ fine or Blended, prices are showing a continuous rise.
Chinese customers are back from holidays and kept on checking prices. however, they remained on the sideline due to high asking prices. It is expected that business activity in China will resume in next week. European customers remained active and floated decent numbers of inquiries. Customers have closed orders with slight negotiations with their selected suppliers before prices show a further rise.
|Count||USD / Bale|
|16/1 CD||710 – 720|
|20/1 CD||720 – 730|
|20/1 CM||800 – 810|
|16/1 CM||790 – 800|
|20/2 CD||765 – 775|
|24/2 CD||830 – 840|
|10/1 CD SIRO YARN FOR WEAVING||650 – 665|
PAKISTAN FABRIC MARKET
The local fabric market started on a dim note and the week closed with mixed trading activity for both narrow and wider width fabrics.
The flow of inquiries dropped considerably however towards the end of the week finishers booked some orders after tough negotiations at a slightly reduced-price level as compared to last week for both narrow and wider width fabrics.
Still, buyers sharing bids 3-4% lower than the asking prices of weavers due to which weavers could not materialize available bulk inquiries.
Weavers remained firm in their asking prices but ready to negotiate against bids from buyers to some extent.
Currently, major weavers are booked in narrow width looms till early April ~ mid-April’22 whereas wider width looms are booked till the end of April ~ early May’22 and offer onward deliveries.
|Construction||Price US$/YD Ex Mill|
|20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN||1.68 – 1.70|
|16X12/108X56 63″ 3/1||1.85 – 1.87|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||1.37 – 1.39|
EXPORT FABRIC MARKET
Far Eastern customers are not taking interest in fresh buying due to high asking prices. According to them, their end customers are not ready to absorb such high prices hence they are not in buying position nowadays. Asking prices remained stable during the week due to stable raw material prices. Suppliers are booked till the end of March ~ mid-April and offer end April onward deliveries.
A Good Flow of inquiries was observed from the USA and European customers however limited buying was witnessed. There was a gap of 6~8% between offered prices and customers’ target prices which is why a limited number of orders were placed. Wider width suppliers are booked till the end of April and offering May onward deliveries.
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||1.66 – 1.68|
|16X12/108X56 63″ 3/1||1.82 – 1.84|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||1.36 – 1.38|
BED LINEN & TOWELS
Home Textiles inquiry flow has increased significantly in recent 2-3 weeks, Customers are placing orders in Pakistan but the volume of orders is decreased due to aggressive price offers from other regions. There is still around a 5-7% difference in customer targets and factories prices due to which orders placement volume is low. There is an expectation of some new orders placed in the forthcoming weeks as stocks of customers are diminishing. Factories are interested to confirm the business and ready to meet realistic targets for the business, but the price is a big challenge and it is increasing each week.
The manufacturers are concerned due to the increasing prices of Cotton, Polyester, and Raw materials. Factories have space in their units for new orders due to less booking. There is also a financial crunch developing throughout the textile industry due to vessel congestion and change of payment mode of factories.
Pakistan Garment sector is quite busy with the execution of their orders which were placed in the last quarter of 2021. Due to the increase in orders, factories are in rush to expand their current setups Numerous production lines are moving towards vertical arrangements. As the demand is there and to fulfill demands current setups are not sufficient to feed customers. Overall inquiry flow is much slower than what we were expecting. The only reason is fluctuating raw material prices. China and Bangladesh both are aggressive and quote their best prices to customers. Due to this factor, many orders are shifting from Pakistan to these countries due to their competitiveness. Factories are booked till Mid-April and offer End-April onward deliveries.
European brands are very concerned to buy Organic and recycled polyester products. In the recent past, many factories have received a demand from their EU customers along with proper certifications.
1. Bangladesh returns to the second position in RMG exports in 2021: After losing its second position as the second-largest apparel exporter in the global market to Vietnam in 2020, Bangladesh regained it in 2021 with export earnings of $35.81. Major big economies in Asia are India, Japan and China are making Bangladesh their sourcing destination for garment items. India is utilizing Bangladesh’s low-cost production capacity and placing many orders coming from other nations. ~Textile Today ~
2. Messe Frankfurt and Inexmoda launch Heimtextil in April 2022: Messe Frankfurt and Inexmoda launch Heimtextil in April 2022. This year from April 26th to 28th, Messe Frankfurt and Inexmoda will open doors to Heimtextil Colombia in South America. Heimtextil Colombia is meant to cover the Americas which represents high potential in the world market. Messe Frankfurt and Inexmoda are targeting Colombia as a business platform for the home, furnishings, hospitality business, and further textile-related products that will gather both top-of-the-line exhibitors and professional buyers from the region. The show is expected to receive 110 exhibitors from countries such as Portugal, Spain, Colombia, Italy, Turkey, India, and France. ~Fibre2Fashion~
3. The Lunar New Year factory closings in Asia this month will provide some temporary relief in container port congestion. ~Home Textiles Today ~
About the future market, it is anticipated that local yarn prices will be conferring to local cotton prices and the international trend of NYCF, the raw material factor will regulate the yarn price accordingly. Further prices trend will be according to the demand and supply of different yarn counts which will lead to the price level.
For the first time, production units are confused too much about higher prices. This should be taken as an early sign of slowing demand. However, apparel sales at the retail level continue to grow. The price trendline continues to point higher. It seems that prices of cotton in the international market will remain firm to upward and there is no expectation of a drop in prices soon.
Going forward we expect that market local fabric may remain range-bound and no drastic change is expected in the coming weeks.
The export yarn market showed improved business activity as customers remained in the market and kept on checking prices. Some deals were concluded from European customers for normal and specialized items. Demand is still there and market sentiment is upward. Hence, orders are expected to be finalized in days to come.
Prices in the export fabric are expected to increase further as cotton stock is depleting in Pakistan however export orders may remain less in numbers as customers will take time to make a buying decision.
The Home textile manufacturers are concerned about increasing prices of Cotton, Polyester, and Raw materials. Factories have space in their units for new orders due to less booking. There is also a financial crunch developing throughout the textile industry due to vessel congestion and change of payment mode of factories.
For Garment, the EU market expanding towards sustainability products and demanding complete certifications. On the other hand, factories are expanding towards vertical setups.