PAKISTAN COTTON MARKET
During the last week in the local cotton market, business activity remained dull and slow. Buyers were away from buying due to the downward trend of prices internationally. On the other hand, no major stock is available with ginners. So leading buyers are focusing on the import of cotton. some ginners had good quality cotton but in a very limited quantity. Major reason behind this is that the stock of cotton is very low, while the arrival of imported cotton has started but there are chances that arrival may be delayed due to Russia and Ukraine war. Political uncertainty is also increasing in Pakistan so it is expected that it will affect the business.
In the local cotton market, slight softness was seen in prices due to less business activity. Internationally prices also showed a steep downward trend. KCA was the same at the level of Rs.20000 per maund. The local cotton market prices were between Rs 18200 ~20,200 per maund.
It is expected that the rate of polyester fiber will increase after an increase in the prices of petroleum products. It could be safely said that polyester may be the alternative to cotton. If the price of polyester increases then there are no chances that the rate of cotton will decrease.
The consumption of cotton in India is increasing while the production of cotton is twelve lac bales less than the initial estimates. In the same way consumption of cotton in Bangladesh has increased and it is facing problems. As predicted, Russia’s invasion of Ukraine did take cotton down some five cents. The front end of the market’s nerves was exposed going into the weekend and the May and July contracts exhibited more weakness. Yet, the market continues to struggle with the Russian atrocities as trading has become very volatile, seemingly taking one step forward and two steps backward.
On Friday the rate of Future Trading of New York Cotton witnessed a decrease of two to three American cents. According to the weekly export report of USDA more than three lac forty-eight thousand bales were sold which was forty-one percent more as compared to last week. Vietnam was on number one with ninety-six thousand bales China was on number two with more than seventy-five thousand bales, Turkey was on number three more than sixty-three thousand bales while Pakistan was on the fourth number after buying more than forty-two thousand bales.
The rate of cotton in Brazil, Central Asia, and Africa remained stable while the rate of cotton in India after fluctuation also remained stable.
Seed cotton (Phutti) equivalent to over 7.4 million or exactly 74,41,833 bales have reached ginning factories across the country till March 1, 2022, registering an increase of 32 percent as compared to the corresponding period of last year. Cotton arrivals in Punjab were recorded at over 3.9 million or 39,28,690 bales registering a surplus of 12.20 percent as compared to the corresponding period of last year when arrivals were recorded 35,01,580 bales. Sindh generated over 3.5 million or 35,13,139 bales registering an increase of 64.46 pc as compared to the corresponding period of last year when arrivals were recorded 21,36,169 bales.
The price of cotton was in between Rs 18,700 to Rs 20,00 per maund while Phutti is almost finished. The price of cotton in Punjab was between Rs 18,900 to Rs 20,700 per maund. The price of Phutti was in the range of USC 1.24~1.38 Lbs. (18,200~20,200/ maund).
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 131.00 | 129.00 | -2.00 |
| Highest | 144.00 | 141.00 | -3.00 |
CRUDE OIL
Crude Oil prices opened at USD 95.72 on a higher level as
compared to last week’s closing figures. In this week, crude oil showed a drastic high rise and closed on the positive side by the end of the week.
On the last day of the week, Crude Oil prices closed at USD 115.68 with an increase of USD 19.96 cents as of the opening figure of the week.
| Opening of Week | Closing Of Week | Change | |
| Price | 95.72 | 115.68 | 19.96 |
EXCHANGE RATE
Last week values of the Pak rupee depreciated against the US Dollar, other major currencies showed mixed trends in both Interbank and open markets.
At the end of the week, Euro closed on a negative note with a figure of 1.09 and the British Pound also closed on a negative note with a figure of 1.32 against USD.
| Selling | Buying | |
| LC Sight | 177.79 | 177.74 |
| LC 120 Days | 177.06 | 177.01 |
| Open Market | 180.08 | 176.02 |
NEW YORK COTTON FUTURE
New York Cotton futures opened on higher levels on Monday as compared to the previous week’s closing figures. NYCF fluctuated on both ways and at last, closed on negative by the end of the week.
On the last day of the week, MAY 2022 closed at 116.42 with a downward of 270 points. On the last day of the week, JULY 2022 closed at 113.11 with a drop of 271 points. On the last day of the week, OCT 2022 closed at 104.31 with a decrease of 10 points.
LIVER POOL INDICES
Liverpool Index A was opened at 135.20 with a lower level of the previous week’s closing figure.
In this week Index “A” moved up and downward ways, hence, closed on the negative side by the end of the week.
On the last day of the week, LPI “A” closed at 134.45 with a decrease of 75 points.
| Opening of the Week | Closing of the Week | Change | |
| Index A | 135.20 | 134.45 | -0.75 |
PAKISTAN YARN MARKET
The local yarn market remained stable in asking prices. Suppliers were proposed to work in big volumes but limited business was made in current price levels, due to rigid prices of raw cotton in the Global market followed by NYCF. On the other hand, weavers were enforced to buy on these stages as no chance to drop market in the shortcoming period and they need to acquire yarn to feed their looms.
PSF prices were Increased by Rs.3/kg by IFL in the domestic market dated 03rd March 2022. PTA, MEG prices were firm in the international market and crude oil prices also stayed invariable by end of the week.
For next week, PSF prices are expected to further increase about Rs.2~3/kg & yarn rates are projected to remain strong as well.
Faisalabad trading market was again gentle and limited activity was seen. Traders were in selling their stocks and weaving units were at a tough point in yarn buying due to a surge in electricity and other outflows.
Fine counts demand was the usual and restrained sale of PV/Viscose reported instead of increased raw fiber prices.
Followings are recent querying prices of yarn in local market based on ex mills:
| Count | Price in Pak Rupees / 10 LBS | Price US$/Bale |
| 16/1 CD | 3089 – 3200 | 695 – 720 |
| 20/1 CD | 3134 – 3311 | 705 – 745 |
| 30/1 CD | 3400 – 3556 | 765 – 800 |
| 20/1 CM | 3711 – 3822 | 835 – 860 |
| 30/1 PC 52:48 | 2622 – 3022 | 590 – 680 |
| 40/1 CM | 4311 – 4445 | 970 – 1000 |
| 60/1 CM | 5756 – 6089 | 1295 – 1370 |
| 80/1 CM | 8489 – 8801 | 1910 – 1980 |
EXPORT YARN MARKET
The export yarn market remained slow. Customers have floated reasonable numbers of inquiries against which suppliers offered prices with flexible notes however, the limited business confirmed against offered prices. It has been observed that cotton prices are showing drastic fluctuations in prices which has made customers and suppliers indecisive to take decisions.
The major reason was uncertainty around the globe after Russia- the Ukraine conflict which also put a significant impact on the stock market all over the world. Customers are buying cautiously and only book limited quantities for urgent needs. they are anticipating that prices will show a soft trend in days to come. It is expected that export yarn business activity will resume as suppliers are now showing interest in export due to slow business activity in the local market as well as serious financial crunch due to late payments. Deals are expected to be concluded within the same price range by showing slight flexibility in presence of firm bids.
Chinese customers remained in the market and floated handsome numbers of inquiries. Customers have good demand and it is expected that business will be finalized in the coming week as soon as suppliers agree to match customer’s idea prices.
European customers were also active and floated decent numbers of inquiries. However, they are resisting high asking prices.
| Count | USD / Bale |
| 16/1 CD | 675 – 685 |
| 20/1 CD | 685 – 695 |
| 20/1 CM | 765 – 775 |
| 16/1 CM | 755 – 765 |
| 20/2 CD | 730 – 740 |
| 24/2 CD | 795 – 805 |
| 10/1 CD SIRO YARN FOR WEAVING | 625 – 650 |
PAKISTAN FABRIC MARKET
In the current week under review, the local fabric market remained dull, and therefore limited trading activity was reported throughout the week for both narrow and wider width fabrics. Weavers received limited inquiries from finishers and resultantly limited business materialization reported in the market because buyers have a feeling that the market may ease down in the coming weeks and therefore they would like to squeeze to the maximum extent before entering into the market again.
Weavers remained soft in their asking prices as compared to last week but ready to negotiate further against any firm bid. Currently, weavers are booked in narrow width looms till mid-April’22 ~ 3rd week April’22 and also have coverage of their wider width looms till end April ~ early May’22 and offering onward deliveries.
| Construction | Price US$/YD Ex Mill |
| 20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN | 1.64 – 1.66 |
| 16X12/108X56 63″ 3/1 | 1.79 – 1.81 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 1.34 – 1.36 |
EXPORT FABRIC MARKET
Far Eastern customers are still quiet as they are not sharing new inquiries due to less demand and soft market trends. They are anticipating a further reduction in prices in days to come.
Yarn prices are a little bit soft however weaving units also have reduced their profit margins to extend their sales position hence they have softened their prices by about 2% to attract customers but still order finalization is limited.
Suppliers are booked till mid of April and offering End-April onward deliveries. There was a limited number of inquiries from European and USA customers thus limited buying was witnessed. Wider width suppliers are booked till the end of April and offering May onward deliveries. Suppliers are offering 2~3% better prices than last week to get orders but still, customers are not placing bulk orders.
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 | 1.62 – 1.64 |
| 16X12/108X56 63″ 3/1 | 1.78 – 1.80 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 1.32 – 1.34 |
BED LINEN & TOWELS
Home Textiles inquiry flow has increased this week, customers are sharing inquiries and even target
prices but the difference between customer target and vendor final prices is still more than 5 %. Some
orders were placed but the overall order situation is slow. Due to uncertain political situations, worldwide customers are reluctant to purchase as all customers are reviewing the market situation. It is expected for a decrease in prices for upcoming weeks due to low business volumes in hand with factories.
The increase in the price of Crude Oil will have a direct impact on polyester prices and due to this PC/CVC fabric prices will increase. The manufacturers are concerned due to low business in hand as factories are running at 50-60% capacities. There is also a financial crunch developing throughout the textile industry due to vessel congestion and change of payment mode of factories.
GARMENTS
Pakistan’s garment industry has been stable for many months and factories are fully booked until May 22. Factories are offering deliveries End May onward. However, factories are putting efforts to deliver current orders for FW22 and developments for SS23. For bulk orders, factories are facing space issues in dyeing houses and CMT units. At the same time, many factories are shifting towards expansion. Raw material prices are continuously fluctuating and do not show any soft trend.
Due to this factor, customers are in wait and see mode and coming up for a decrease in prices.
This is evidenced by customers now showing interest in sustainability products as well as specialty fibers such as Tencel, Modal, Viscose, Lyocell, and others. Already, customers are also demanding accessories made from recycled material, which we usually use in garments, care labels, hangtags, etc.
GLOBAL NEWS
The air cargo freight rates around the globe are likely to go up as more and more countries close their airspace for Russian carriers in response to its invasion of Ukraine. Countries like the USA, Canada, Denmark, Italy, France, and Belgium have already banned all aircraft from Russia. Responding to this, Russia has also banned flights from several European countries and has banned carriers from Europe and UK from using its airspace. The move has resulted in difficulties for European flights flying to east Asian countries like Japan, Korea, and China. Taking detours to reach these destinations is likely to increase the time and cost of flight operations. AirBridgeCargo Airlines, the largest Russian cargo airline, has also been banned from Europe, causing air freight rates to increase further. The suspension of services by airlines to east Asia is adding to the woes of the already strained global supply chain. ~Fibre2Fashion~
Ukraine, Russia cancel $200M orders in the hit to Turkish textile industry: Textile and leather goods makers in Istanbul’s garment district are feeling the pinch of Russia’s invasion of Ukraine. Customers in Moscow and Kyiv have canceled $200 million in orders in the past week, industry officials say. The loss of trade adds to strains, with officials estimating that more than $1 billion is directly at risk to the textile industry alone if the conflict in Ukraine continues. ~Daily Sabah~
The fallout from Russia’s large-scale invasion of Ukraine continues to mount as Chanel, Nike, Hermès,
Richemont, Ikea and most recently Inditex, the world’s largest apparel retail by revenue shutter stores in the Eurasian nation, and TJX look to sell its stake in the local retailer Familia. ~Sourcing Journal~
GOING FORWARD
About the future market, it is anticipated that local yarn prices will be conversing with local cotton prices and international trends of NYCF.
The raw material factor will control 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.
The overall local cotton market remained on the downward side. A drastic drop in prices was observed. It seems that buyers will wait and watch to settle the cotton market trend. However, no major drop is being expected in the coming days, except there could be a reason for the Ukraine and Russia war. Other than no sentiment is being observed which may affect further drop in prices.
The local fabric market remained slow during the week. It is expected to remain silent and soft for the coming weeks.
The export yarn market showed dull business activity despite the presence of a good number of inquiries. Suppliers are now in flexible mode and we might see order confirmations as the price gap between customers’ targets and suppliers’ offers are not wide anymore.
The export fabric market was slow during the week even suppliers have softened their prices by about 2%. For the coming weeks, the market may have remained mixed.
The home textile manufacturers are concerned due to low business in hand as factories are running at 50-60% capacities. There is also a financial crunch developing throughout the textile industry due to vessel congestion and change of payment mode of factories.
The demand for garments is there and the factories are fully booked until the end of May 22. However, pricing is currently the biggest challenge as customers show no cooperation to raise prices.
