PAKISTAN COTTON MARKET
During the last week in the local cotton market, business activity remained dull due to fewer cotton stocks with the ginners. Few ginners had still limited stock of cotton of low quality but they were demanding high rates. New crop arrival is expected by end of next week and buyers are keenly awaited to feed the cotton to run units.
In the local cotton market, prices remained firm this week despite no business. Although, KCA was the same at the level of Rs.20,500 per maund. The local cotton market prices were between Rs 18800 ~ and 20,800 per maund. There was no business activity in the country due to prevailing political uncertainty and disturbance of the financial circle. Buyers are in wait and watch mode, keeping eyes on the new crop arrival which is expected by end of May.
It is pertinent to mention here that it is expected that next year the production of cotton will increase but according to the information received from the lower areas of Sindh, it is estimated that sixty percent
of the cotton production may be affected due to acute water shortage.
ICE cotton futures dropped on Friday after the US Department of Agriculture raised
its estimate for global production and ending stocks for the 2021/22 marketing year in its monthly supply-demand report.
The WASDE report was mainly neutral with a slightly bearish thing. The world-ending stocks went up. It is significant to note that we’ve had an almost continuous decrease in ending stocks and this rise perhaps signals the end of the reduction.
The USDA did not change or adjust US exports. We also saw China’s domestic consumption fell by half a million bales and that was significant.” Month-to-month changes in the global 2021/22 cotton estimates are small, with higher production and lower consumption resulting in an 800,000-bale increase in ending stocks, the USDA said. Production is forecast 340,000 bales higher, with increases for Pakistan and Greece. A 500,000-bale decline in China’s expected consumption resulted in a similar decline in the global estimate.
The USDA’s weekly export sales report on Thursday showed net sales of 62,900 running bales of cotton for 2021/2022 – a marketing-year low – were down 73% from the previous week and 80% from the prior 4-week average.
The price of cotton was between Rs 18,800 to Rs 20,800 per maund while Phutti is almost finished. The price of Phutti was in the range of USC 1.25~1.38 Lbs. (18,800~20,800/ maund).
| Opening Of The Week | Closing Off the Week | Change | |
| Lowest | 125.00 | 122.00 | -3.00 |
| Highest | 138.00 | 136.00 | -2.00 |
CRUDE OIL
Crude Oil prices opened at USD 103.28 with a higher level as compared to last week’s closing figures.
In this week, crude oil prices were influenced in both ways, hence closed on the negative side by the end of the week.
On the last day of the week, Crude Oil prices closed at USD 98.26 with a decrease of USD 5.02 as of the opening figure of the week.
| Opening of Week | Closing Of Week | Change | |
| Price | 103.28 | 98.26 | -5.02 |
EXCHANGE RATE
Last week value of the Pak rupee depreciated against US Dollar, other major currencies showed mix trend 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 British Pound also closed on a negative note with a figure of 1.30 against the USD.
| Selling | Buying | |
| LC Sight | 188.05 | 188.00 |
| LC 120 Days | 185.82 | 185.77 |
| Open Market | 190.54 | 186.27 |
NEW YORK COTTON FUTURE
New York Cotton futures opened extraordinary on higher levels on Monday as compared to the previous week’s closing figures.
NYCF showed a downward trend for a whole week and closed negative by the end of the week.
On the last day of the week, MAY 2022 closed at 132.41 with a downward of 553 points.
On the last day of the week, JULY 2022 closed at 131.06 with a drop of 322 points.
On the last day of the week, OCT 2022 closed at 120.98 with an increase 120 of points.
LIVER POOL INDICES
Liverpool Index A was opened at 152.30 with a lower level than the previous week’s closing figure.
In this week Index “A” showed a downward trend overall, hence rose in mid of week only. By the end of the week close on the same level without any change.
On the last day of the week, LPI “A” closed at 152.30 on the same opening figure.
| Opening of the Week | Closing of the Week | Change | |
| Index A | 152.30 | 152.30 | 0.00 |
PAKISTAN YARN MARKET
The Local yarn market went firm by following NYCF and the local cotton market. Prices were increased after the Pak Rupees devaluation. Limited inquiry flow was seen thus restricted business was seen with sales pressure in such upmarket price points. Mills are sold for April. PC yarn was constant and sellers were apprehensive to book the majority of orders.
PSF prices were increased by Rs.2/kg dated 4th April 2022 IFL in the domestic market due to exchange rate and Pak Rupee depreciation. It is now at Rs. 290/Kg. PTA and MEG prices were secure in the international market and crude oil prices also continued inflexible by end of the week. For next week, prices are estimated to remain strong.
Faisalabad trading market virtuous activity was seen. Sales of PV/Viscose yarns were reported as periodic orders of PV/Viscose yarn underway. Fine counts were also in demand and realistic deals were made. Traders were in peddling their stocks and loom owners were in a tough position in yarn attaining.
About the future market, it is anticipated that yarn prices will be conversing to local cotton prices and
international trends of NYCF, the raw material dynamic will control the yarn price consequently. Further prices inclination will be according to the demand and supply of different yarn counts which will lead to the price level.
The followings are recent querying prices of yarn in the local market based on ex mills:
| Count | Price in Pak Rupees / 10 LBS | Price US$/Bale |
| 16/1 CD | 3173 – 3291 | 675 – 700 |
| 20/1 CD | 3197 – 3408 | 680 – 725 |
| 30/1 CD | 3502 – 3667 | 745 – 780 |
| 20/1 CM | 3832 – 3973 | 815 – 845 |
| 30/1 PC 52:48 | 2656 – 3032 | 565 – 645 |
| 40/1 CM | 4466 – 4513 | 950 – 960 |
| 60/1 CM | 5642 – 6159 | 1200 – 1310 |
| 80/1 CM | 8603 – 8932 | 1830 – 1900 |
EXPORT YARN MARKET
The export yarn market showed slow business activity for another week in a row.
Customers floated a limited number of inquiries against which order confirmation was dull.
Suppliers were actively offering prices and followed the inquiries to get orders.
On the other side, cotton prices showed firmness and kept on fluctuating in the same range with minor changes.
However, this has not put any impact on yarn prices as the business remained under pressure.
Customers are still indecisive about new buying and not showing any interest at current levels. They think that prices must show some drop and after that, they will book limited quantities because the demand for end/final produce from customers all over the globe is depleting constantly.
If we overall analyze the situation, we might see an improvement in business activity in April as customers are now working on new buying as stocks of yarn are dropping.
Chinese customers floated good numbers of inquiries against which order materialization was slow. Customers remained in the market and placed orders only where they received desired price levels. At the same time, Covid is again hitting Chinese different regions which is another reason for slow business activity.
European customers remained on the sideline. Very limited numbers of inquiries were floated against which business activity was almost nil. They are still expecting a decline in prices which was the reason for slow business activity.
| Count | USD / Bale |
| 16/1 CD | 700 – 710 |
| 20/1 CD | 715 – 725 |
| 20/1 CM | 765 – 775 |
| 16/1 CM | 755 – 765 |
| 20/2 CD | 825 – 835 |
| 24/2 CD | 850 – 860 |
| 10/1 CD SIRO YARN FOR WEAVING | 605 – 635 |
PAKISTAN FABRIC MARKET
In the local cotton market, dull activity was reported for another week and the week closed with slow
sentiment for both narrow and wider width fabrics owing to uncertainty prevailing in the international
markets.
The buyer floated limited inquiries and remained sidelined throughout the week. Weavers are following
inquiries and showing interest in capturing floating orders even with reduced inflows, but buyers are bidding approx 3~4% lower than the asking prices of weavers. As a result, slow business activity was reported for both narrow and wider width fabrics.
Currently, weavers are booked in narrow width looms till early May’22 and also have coverage of their wider width looms till mid-May’22 and offer onward deliveries.
| Construction | Price US$/YD Ex Mill |
| 20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN | 1.65 – 1.67 |
| 16X12/108X56 63″ 3/1 | 1.80 – 1.82 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 1.34 – 1.36 |
EXPORT FABRIC MARKET
No considerable business activity was seen from Far Eastern countries during the week under review. China is not into buying nowadays due to slow demand and a serious Covid situation. Korean, Japan, Bangladesh, Vietnam, and Malaysia markets remained almost aside from buying.
The market was very uncertain due to the unstable Pak rupee currency against US Dollar during the week.
Suppliers are booked till early May and offering mid to end May onward deliveries. Suppliers are chasing orders very aggressively due to slow demand and less business in hand over the last
couple of weeks.
Limited inquiries were received from the European and USA markets due to the uncertain market situation mainly due to Russia / Ukraine war as European customers are taking time for buying decisions.
Wider width suppliers are also chasing orders closely as they are also not gotten bookings from their regular customers for the last couple of weeks.
Suppliers are booked till the end of May and offer June onward deliveries. Some of the units are still offering End 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 | 1.64 – 1.66 |
| 16X12/108X56 63″ 3/1 | 1.78 – 1.80 |
| 20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN | 1.35 – 1.37 |
BED LINEN & TOWELS
Home Textile’s overall situation is the same as last week, few orders are placed by customers but a large
volume of business is not being placed. US big retailers have slowed down their goods lifting from factories and monitoring the situation as stocks have piled up with them and they are planning according to the current situation. NYCF is one of the factors in customers’ decisions as they are waiting for the market to settle down.
The next few weeks are expected to remain the same as per the current situation and customers will keep
reviewing all factors before placing some volumes. There is also a financial crunch developing throughout the textile industry due to the slow lifting of goods, vessel congestion, and change of payment mode of factories which is a big concern for the industry.
GARMENTS
Overall apparel customers have kept the factories’ production space occupied till the end of June-22. Now factories are offering July onward deliveries. Raw material prices are showing a firm sentiment, hence garment manufacturers are also not ready to reduce prices beyond a certain level considering a firm sentiment of yarn prices from the spinners.
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. Pakistani garment factories have got all the necessary setup and compliance requirements to meet as required by customers.
GOING FORWARD
About the future market, it is anticipated that Local yarn prices will be conversing to local cotton prices and international trends of NYCF, the raw material dynamic will control the yarn price consequently.
Further prices inclination will be according to the demand and supply of different yarn counts which will lead to the price level.
Slow business activity was observed in cotton locally and internationally, that is why somehow dropped in prices were observed. it seems that prices will remain the same in the coming days without any major changes.
Local fabric expected slow sentiments with limited trading activity for both narrow and wider width fabrics.
The export yarn market showed dull business activity despite a good number of inquiries. Suppliers are offering attractive prices to catch orders but customers remained on the sideline of buying. We might see a recovery in business volumes during April as customers will start buying slowly gradually to maintain their stocks level.
Export fabric business activity remained dull due to slow demand from Far Eastern markets and uncertain situation in the EU and USA because of Russia / Ukraine war. European brands are very concerned to buy Organic and recycled polyester products in their garment. In the
recent past, many factories have received a demand from their EU customers along with proper certifications.
The next few weeks are expected to remain the same as per the current situation and customers will keep
reviewing all factors before placing some volumes. There is also a financial crunch developing throughout the textile industry due to the slow lifting of goods, vessel congestion, and change of payment mode of factories which is a big concern for the industry.
