PAKISTAN COTTON MARKET
During the last week in the local cotton market, Slow business activity was observed locally and internationally, on the other hand, market prices are driven on the higher side. The overall market is confused and bullish, buyers are in wait and watch mode. Ginners had limited stock while an international organization had a stock of twenty-five thousand bales. All eyes are on the next season, therefore, local buyers are waiting for the new crop arrivals which are expected by end of May to early June.
In the local cotton market, prices remained firm this week despite of less business activity. KCA also remained the same at the level of Rs.20,500 per maund. The local cotton market prices were between Rs 18800 ~ and 20,900 per maund.
In Pakistan, Cotton yields have fallen by 26 percent from 880 kgs/hectare to 652 kgs/hectare over the last 10 years, while in Punjab the decline has been more pronounced and productivity has fallen by 36 percent. Pakistan is losing at least $ 5 billion directly on account of the low production of cotton.
An increase in cotton production will have a direct impact of $ 1 billion per 1 million bales and a 7 times multiplier impact on the fiscal flows in the economy. Overall cotton area in this decade has declined by
33 percent from 2.9 million hectares to 1.9 million hectares. Almost 1.5 million farmers grow cotton out of which 75 percent is grown in Punjab while the rest is grown in Sindh, while the cotton area in Punjab has decreased by 50 percent from 2.53 million hectares (2012) to 1.28 million hectares (2022).
Fluctuation was seen in the rate of cotton in international cotton markets. The overall decrease was witnessed in the rate of Future Trading of New York Cotton because reports are coming that spell of rain is going to be started in cotton-producing areas especially, Texas.
As per the USDA export report more than fifty thousand bales of the year 2021-22 were sold which is 15 percent less as compared to last week. India was number one with more than nineteen thousand bales; Peru was number two with more than ten thousand bales while Guatemala was number third with more than six thousand bales. For the year 2022-23 more than one lac thirty-six thousand bales were sold. The rate of cotton in Brazil, Central Asia, and Africa remained stable. The rate of cotton in India remained stable after some fluctuation.
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 1.23~1.37 Lbs. (18,800~20,900/ maund).
|Opening Of the Week||Closing Of the Week||Change|
Crude Oil prices opened at USD 108.21 with a higher level as compared to last week’s closing figures.
This week, crude oil prices showed a downward trend and closed on the negative side by the end of the week.
On the last day of the week, Crude Oil prices closed at USD 102.07 with a decrease of USD 6.14 cents as of opening figure of week.
|Opening of Week||Closing Of Week||Change|
Last week value of the Pak rupee depreciated against the 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 1.08 and British Pound also closed on a negative note with a figure of 1.28 against the USD.
|LC 120 Days||184.29||184.24|
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 mix trend in a whole week and moved on both sides with moderate levels after a wide drop on the closing of Tuesday, and by the end of the week closed on the negative side.
On the last day of the week, MAY 2022 closed at 139.46 with a downward of 528 points.
On the last day of the week, JULY 2022 closed at 135.85 with a drop of 740 points.
On the last day of the week, OCT 2022 closed at 124.35 with a decrease 511 of points.
LIVER POOL INDICES
Liverpool Index A was opened at 155.90 with the same level as the previous week’s closing figure.
In this week’s Index, “A” rose extraordinary and reached all levels high later dropped in the next session but again slightly recovered, hence closed on the positive side.
At the last day of the week, LPI “A” closed at 157.20 with an increase of 130 points.
|Opening of the Week||Closing of the Week||Change|
PAKISTAN YARN MARKET
The local yarn market continued stable in asking prices with peddling inquiries in the general market. Sellers were captivated by selling the yarn whereas buyers hold further booking thus limited activity was done. The raw cotton prices in the Global market are followed by NYCF. On another side presently the acute pressure of sales in the challenging market is anxiously expected if NYCF’s inclination is downward.
PSF prices remained unchanging in the domestic market during the last week ended. PTA and MEG prices were secure in the international market and crude oil prices were also uncompromising by end of this week. For next week, prices are assessed to stay strong.
Faisalabad trading market was again moderate and limited activity was seen. Traders were in selling their stocks and loom owners were in a tough position in yarn managing. Fine counts demand was the usual and reticent sale of PV/Viscose reported instead of increased raw fiber prices.
|Count||Price in Pak Rupees / 10 LBS||Price US$/Bale|
|16/1 Carded Weaving||3151 – 3267||675 – 700|
|20/1 Carded Weaving||3174 – 3384||680 – 725|
|30/1 Carded Weaving||3477 – 3641||745 – 780|
|20/1 CM||3804 – 3944||815 – 845|
|30/1 PC Carded Weaving 52:48||2637 – 3011||565 – 645|
|40/1 Carded Compact Weaving||4434 – 4481||950 – 960|
|60/1 Carded Compact Weaving||5601 – 6114||1200 – 1310|
|80/1 Carded Compact Weaving||8542 – 8868||1830 – 1900|
EXPORT YARN MARKET
The export yarn market showed slow business activity for another week in a row.
Customers floated limited numbers of inquiries against which order confirmation was minimal. Suppliers were actively offering prices and were trying to grab each and every order.
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.
Chinese customers remained on the sideline due to lockdowns after a new strain of Covid in many provinces.
That halted complete business activity as many ports i.e Shanghai/ Ningbo were also closed. This has once again created huge congestion at China ports which will eventually effect the Global supply chain of
Customers are very upset with uncertainties prevailing due to Ukraine- Russia war and not taking any chances for future deals.
At the same time, most of the end customers’ consumption has been squeezed which has forced customers to book limited quantities with selected vendors on desired price levels only.
Pressure is building up on suppliers with every single day passed as they can’t afford to keep stocks with them and trying to sell as much as possible.
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 Carded Weaving||705 – 715|
|20/1 Carded Weaving||720 – 730|
|20/1 CM||770 – 780|
|16/1 CM||760 – 770|
|20/2 CD||830 – 840|
|24/2 CD||855 – 865|
|10/1 CARDED SIRO YARN WEAVING||610 – 635|
PAKISTAN FABRIC MARKET
The local fabric market remained silent throughout the week for both narrow and wider width fabrics.
Weavers received limited inquiries from their buyers as they opted to remain sidelined throughout the week owing to the prevailing uncertainty in the local cotton and yarn market. Weavers are feeling pressure in the absence of confirm inquiries and following customers /agents for any reasonable firm bid but buyers are still bidding approx 5~6% lower than the asking prices of weavers. As a result, thin business activity reported for both narrow and wider width fabrics.
Most of the customers are holding ready goods with the suppliers which caused further panic in the market. Suppliers are facing financial liquidity due to non moving of the ready goods.
Currently, weavers are booked in narrow width looms till End-May’22 and also have coverage of their wider width looms till end May’22/early June’2022 and offering onward deliveries.
|Construction||Price US$/YD ExMill|
|20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN||1.64 – 1.66|
|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
Business activity for Far Eastern markets is not picking up since last couple of weeks as their end customers are not taking interest in fresh buying.
Despite of too much increase of NYCF, suppliers are keeping their asking prices stable as there is no good demand in the market.
Suppliers are chasing new orders very aggressively even they have reduced their looms flows about 10~15% just to offer competitive offers.
Suppliers are offering new deliveries with 30~40 days lead time now a days depending on the quality.
Flow of inquiries increased from European and USA buyers but their targets are too low.
Suppliers have reduced their profit margins but still they could not match customer target prices hence very limited booking was observed
Wider width suppliers are booked for next 40~50 days in average and looking for new 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||1.66 – 1.68|
|16X12/108X56 63″ 3/1||1.80 – 1.82|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||1.36 – 1.38|
BED LINEN & TOWELS
Overall the home textile market was sluggish. There were few order placements and inquiry flow because of less demand in the market. As a result, the factories are working on their 40-50% loom capacity. The orders placed this week are those that were in negotiation with customers for the last 2 ~ 3 months.
The retailers and large importers have slowed down their goods lifting from factories due to which stocks
piled up with them in their warehouses. NYCF is one of the factors in customers’ decisions as they are waiting for the market to settle down. The delivery times are getting efficient by the manufacturers due to the stock and market situation.
The financial crunch developed throughout the textile industry due to the slow lifting of goods, Port
Congestion, and Vessel Delays Worldwide.
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.
In a recent week, it has been observed that customers have held the orders and they are not showing any interest in placing big orders in the market. The only reason is the instability of raw material prices and the other factor is Ukraine-Russia War.
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.
With China fighting a COVID resurgence and announcing new restrictions and lockdowns in several cities, waiting for container ships at several ports there like Qingdao is rising, putting further pressure on a strained global supply chain. The Russia-Ukraine war is also severely disrupting shipping and air freight. As Russian forces cut off shipping routes, logistics firms are suspending services and air freight rates are skyrocketing.
Global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023, according to a recent report by the International Monetary Fund (IMF). This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than projected in January. Additionally, due to high debt and deficit levels, countries are under severe financial stress, said World Bank Group president David Malpass.
Retail’s in a ‘Quandary’ Figuring Out Consumer Spending: Fashion companies estimating future sales and planning how much to produce for upcoming seasons are wondering if the consumer is healthy enough to spend through historic inflation.
About the future market, it is expected that local yarn prices will be conversing to local cotton prices and
international trends of NYCF, the raw material dynamics 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 locally and internationally in cotton front. On the other hand, market prices are not stabilizing and sharp changes are being observed. The overall market is confused and bullish, buyers are in wait and watch mode. Local buyers are also waiting for the new crop arrivals which are expected by end of May / Early June.
Local fabric market remained mixed. Customers are targeting 5~6% lower than offered prices hence thin
business activity was reported.
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 an improvement in business volumes during the month of May.
Export fabric business remained slow during the week. Despite of increase in NYCF, they are keeping their prices stable just to remain competitive but still they could not extend their sales much.
For home textile, the next few weeks will be the same with slow business sentiment. The customers will keep reviewing all factors before placing some volumes and it is expected that manufacturers will shrink their margins further to win the orders.
The overall garment industry is slow and it looks like it will be in full swing once the new cotton arrived which is expected from June.