PAKISTAN COTTON MARKET
During the last week in the local cotton market, In the first month of the new cotton season in the country, the cotton rate has dropped. Overall, the bearish trend continued to prevail in the international cotton market.
Currently, the Cotton production target in Punjab does not achieve; however, rains have positive effects on cotton production. The 17% sales tax on cotton has been abolished due to the efforts of the Pakistan Cotton Ginners Association. There are complaints that the textile and ginning sector was ignored in the budget.
In local Cotton market prices had been fell. The price of Phutti also come down by Rs6500 to Rs7000 per 40 kg.
The price of cotton per maund is Rs. 16,000. KCA kept the spot rate reduced in this week at level of Rs. 16,500 per maund.
In the start of the new cotton season, the price of cotton which was Rs 23,000 per maund fell by Rs 7000 per maund. The spot rate has also come down witnessed a decline of Rs 5,300 per maund.
Textile and spinning mills are interested in buying cotton due to low prices. Business volume has been very high.
Due to the possibility of rains before Eid, many mills are making deals for delivery after Eid.
Many cotton producing areas of Sindh and Punjab, at present the cotton crop is better except in some areas due to which the supply of cotton is increasing day by day. Many ginning factories will resume their operations from July 15 while the supply of Phutti will significantly increase from July 15.
Cotton prices are also in decline in international markets. The economic situation of the country is not good. No one is looking seriously to stop the high flight of US dollar. The political situation is also instable. According to reports, due to continuous rise in prices of energy and petroleum products and the possibility of further increase in interest rates and prolonged load shedding, some millers are thinking about closing their mills for about a week along with the Eid-ul-Adha holidays. According to the information received from Faisalabad, sizing and cotton looms have already been closed down there.
Meanwhile, textile mills in Punjab have been shut down for eight days. According to the USDA Weekly Export and Sales Report, 48,100 bales were sold for the year 2021-22, which was significantly higher than the previous week. Vietnam topped the list with 33,900 bales. China came in second with 25,400 bales. Mexico came in third with 3,500 bales.
The price of cotton in Sindh and Punjab was in between Rs.16,000 and per maund. The rate of Phutti per 40 kg was in between Rs 6300 to Rs 7,000.
The demand for cotton yarn has declined, while the financial crisis is increasing in the market. However, the rate of US dollar is also decreasing.
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 98.00 | 94.00 | -4.00 |
| Highest | 104.00 | 100.00 | -4.00 |
CRUDE OIL
Crude Oil prices opened at USD 99.50 with lower level as compared to last week closing figures.
In this week, crude oil prices showed a downward trend and closed on the downside by the end of the week.
On the last day before the holidays, Crude Oil prices closed at USD 98.53 with a decrease of USD 0.97 cents as of the opening figure of the week.
| Opening of Week | Closing Of Week | Change | |
| Price | 99.50 | 98.53 | -0.97 |
EXCHANGE RATE
In last day before holidays values of Pak rupee depreciated against US Dollar, other major currencies
showed mix trend in both interbank and open markets.
At the end of today, Euro closed on a positive note with figure of 1.0183 and British Pound also closed on
positive note with figure 1.1923 against USD.
| Selling | Buying | |
| LC Sight | 207.33 | 207.28 |
| LC 120 Days | 201.92 | 201.87 |
| Open Market | 210.53 | 205.87 |
NEW YORK COTTON FUTURE
New York Cotton futures opened with low levels on Monday as compare to the previous week`s closing figures.
NYCF showed mixed sentiment in both way this week and closed on the negative side by the day before the holidays.
On the last day before the holidays, OCT 2022 closed at 96.39 with a decrease of 499 points.
On the last day before the holidays, DEC 2022 closed at 88.61 with reduction of 487 points.
On the last day before the holidays, MAR 2023 closed at 84.68 with a sliding of 469 points.
LIVER POOL INDICES
Liverpool Index A was opened at 138.60 with a lower level than the previous week closing figure.
In this week`s Index, LPI A showed a downward trend in this week and closed on the lower side by the end of the week.
At the last day before the holidays, LPI A closed at 134.00 with a decrease of 46 points.
| Opening of the Week | Closing of the Week | Change | |
| Index A | 138.60 | 134.00 | -4.60 |
PAKISTAN YARN MARKET
The Local yarn market went silent earlier a week of Eid ul Azha. The market remains to tumble following NYCF and the local cotton market. After a lineage in NYCF and local cotton restricted business was seen.
Spinners are facing energy costs and shutdown hitches. Mills are carrying stocks and mostly closing productions during Eid Holidays. Whereas buyers are in perceiving situations & the raw cotton prices in the Global market are followed by NYCF.
PSF prices remained unchanging in the domestic market during the week ended. PTA and MEG prices were similarly steady in the international market while crude oil prices also little dived by end of this week. For next week, PSF prices are expected to stay stable, and Yarn prices are similarly projected to remain constant.
Faisalabad’s trading market has shown no bustle. Limited sales of PV and Viscose yarns were reported. Cash flow crunch remains preoccupied. There is less fiat for attaining further yarn. Traders were strident with their stocks and loom owners were in an inflexible position in yarn managing.
The followings are the latest querying prices of yarn in the local market based on ex mills:
| Count | Price in Pak Rupees / 10 LBS | Price US$/Bale |
| 16/1 Carded Weaving | 3214 – 3317 | 620 – 640 |
| 20/1 Carded Weaving | 3265 – 3447 | 630 – 665 |
| 30/1 Carded Weaving | 3447 – 3732 | 665 – 720 |
| 20/1 CM | 3810 – 3965 | 735 – 765 |
| 30/1 PC Carded Weaving 52:48 | 2773 – 2954 | 535 – 570 |
| 40/1 Combed Compact Weaving | 4276 – 4380 | 825 – 845 |
| 60/1 Combed Compact Weaving | 5857 – 6116 | 1130 – 1180 |
| 80/1 Combed Compact Weaving | 8345 – 8578 | 1610 – 1655 |
EXPORT YARN MARKET
Export yarn market remained under declining trend due to continuous fall in cotton prices around the globe.
Customers remained on side line as they are expecting prices to drop down further.
It is expected that prices will remain soft in days to come due to limited demand and continuous drop in raw material prices.
New cotton arrival has been started and suppliers are putting tremendous efforts to get orders from spinning mills. However, buying of spinning mills is very slow due to lack of yarn orders from Pakistan and export customers.
All yarn suppliers have already reduced their prices and showing flexible attitude in presence of firm bids.
Most of the suppliers are not being able to continue their production by buying cotton on existing prices, hence, many factories are getting closed specially during upcoming Eid holidays.
Chinese customers remained on side line and no such business activity was witnessed. Customers floated limited number of enquiries just to check the market. Prices is dropping continuously so no business was concluded.
European customers floated limited numbers of enquiries but firm bids are yet to be received. Customers are busy in PV and it is expected that some demand will increase after PV:
| Count | USD / Bale |
| 16/1 Carded Weaving | 725 – 735 |
| 20/1 Carded Weaving | 735 – 745 |
| 20/1 CM | 780 – 790 |
| 30/1 CM | 890 – 908 |
| 16/1 CM | 772 – 780 |
| 20/2 CD | 725 – 735 |
| 24/2 CD | 745 – 753 |
| 10/1 CARDED SIRO YARN WEAVING | 550 – 555 |
PAKISTAN FABRIC MARKET
In current week under review the local fabric market remained lack luster due to sharp drop in local cotton market and resultantly, slow trend reported for another week for both narrow and wider width fabrics.
Finishers and local brands remained sidelined throughout the week and only shared limited Inquiries with limited quantities therefore thin and negligible business materialization reported in the market for both narrow and wider width fabrics
Buyers are bidding approximately 6~7% lower against offered price. Currently, weavers are booked in narrow width looms till early August 2022 whereas they have covered their wider width looms till mid-August 2022 and offering onward deliveries.
| Construction | Price US$/YD Ex Mill |
| 20CDX16CD/128X60 – 63″ 3/1 “S” TWILL PAK CTN | 1.52 – 1.54 |
| 16X12/108X56 63″ 3/1 | 1.69 – 1.71 |
| 20CDX20CD/108X58 63″ 3/1 “S” TWILL PAK CTN | 1.26 – 1.28 |
EXPORT FABRIC MARKET
Due to continuous drop in raw material prices, Far eastern customers are in wait and see mode. They are sharing limited inquiries for price checking mainly.
Customers are not sharing their target prices nor placing orders in current market situation
Suppliers are offering attractive offers but still unable to get bulk orders.
Asking prices by the suppliers were further soft about 2% just to get orders.
Currently suppliers are offering 30~40 days lead time as they are in a position to start production within a week or 10 days due to slow order situation.
European and USA customers are back from the textile fairs like Heimtex, Technical textile, PV and TW.
They have exchanged limited inquiries during the week but they are also waiting right time to place orders.
Customers are planning to place orders only after the prices are settled down because as per their opinion, the prices will further drop down in days to come.
Wider width suppliers are booked till end of Aug and offering onward deliveries.
There are Eid festival holidays in Pakistan from 8th July ~ 12th July so the business activity will remain slow in coming days.
Following are 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 | 1.52 – 1.54 |
| 16X12/108X56 63″ 3/1 | 1.68 – 1.70 |
| 20CDX20CD/108X58 63″ 3/1 “S” TWILL PAK CTN | 1.24 – 1.26 |
BED LINEN & TOWELS
Home Textiles overall situation is slow as inquiry flow has decreased around the globe, new order
placements are also on decline. Factories are facing cancellation of orders and slow lifting is impacting the cash flows as well as their production lines. NYCF has started a steep decline due to which local cotton is also on decline. Yarn prices are also on reducing and it will help in offering competitive prices.
Next few weeks are expected to be remain same as per current situation and customers will keep
reviewing all factors before placing some volumes as demand is decreased all around the globe due to
worldwide recession. There is also a financial crunch developing throughout the textile industry due to
slow lifting of goods, vessel congestion and change of payment mode of factories which is a big concern for the industry.
GARMENTS
Apparel customers have kept the factories busy till Mid Sep 22 and are offering onward deliveries. Raw material prices are fluctuating on a daily basis hence garment manufacturers are also confused as customers are asking for lower prices, and raw material is uncertain due to which both factories and customers are in wait & see situation.
Internationally, many major retail brands are reducing their purchases and not placing big orders due to the lower demand in the market, which directly affects the manufacturers as they have fewer orders from
customers and are also not in a good sales situation. Therefore, they reduced their production capacities by up to 40-50%.
In all the current circumstances, the good news is factories are getting new developments for next season FW23 and SS23 and expecting bulk orders for SS23 against which the development has been delivered.
Sustainability remained an important element as most of the customers especially leading global brands
required eco-friendly products. Pakistan garment factories have got all the necessary setup and compliance requirements to meet as required by customers. Along with sustainable products, customers have shown interest in Special fibers as well as textured fabrics garments.
GOING FORWARD
About the future market, it is projected that local yarn prices will be nattering to local cotton prices and
international trends of NYCF, and demand from the end consumers. Further price fondness will be according to the demand and supply of different yarn counts which will lead to the price level.
For the local cotton, significant downward trend in the rate of cotton in international cotton markets was also witnessed. Textile and spinning mills are interested in buying cotton due to low prices. Business volume has been very high.
For coming week, we expect slow sentiments to prevail for both narrow and wider width fabrics in domestic market.
Export yarn market remained under depressed business activity as customers are on side line of buying.
Drastic drop in cotton prices completely changed the scenario as customers stopped their buying in anticipation of further decline in prices.
Export fabric business remained dull. Due to continuous drop in raw material prices, customers prefer to wait and only placing urgent orders as per current price levels. Business activity will remain slow until the prices are settled down.
The garment industry is under pressure. It is expected that 3rd quarter of this year 2022 will be tough for garment manufacturers.
