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 will not be achieved; 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 fallen down. The price of Phutti also come down by Rs6500 to Rs7000 per 40 kg. The price of cotton per maund is Rs. 16,800-17,000. KCA kept the spot rate reduced in this week at level of Rs. 16,700 per maund.
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 declined 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’s 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.16,700 and Rs.17,000 per maund. The rate of Phutti per 40 kg was in between Rs 6500 to Rs 7,200.
The demand for cotton yarn has declined, while the financial crisis is increasing in the market. However, the rate of the US dollar is also decreasing.
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 123.00 | 98.00 | -25 |
| Highest | 129.00 | 104.00 | -25 |
CRUDE OIL
Crude Oil prices opened at USD 109.57 with an upward level as compared to last week’s closing
figures.
In this week, crude oil prices showed a downward trend and closed on a downward side by the end of
the week.
On the last day of the week, Crude Oil prices closed at USD 108.43 with a decrease of USD 1.14 cents as of the opening figure of the week.
| Opening of Week | Closing Of Week | Change | |
| Price | 109.57 | 108.43 | -1.14 |
EXCHANGE RATE
Last week’s value of the Pak rupee appreciated against the US Dollar, and other major currencies showed mix trend in both interbank and open markets.
At the end of the week, Euro closed on a positive note with a figure of 1.0429 and British Pound also closed on a positive note with figure of 1.2096 against the USD.
| Selling | Buying | |
| LC Sight | 204.65 | 204.60 |
| LC 120 Days | 199.55 | 199.50 |
| Open Market | 208.06 | 203.45 |
NEW YORK COTTON FUTURE
On the last day of the week, OCT 2022 closed at 105.38 with an increase of 223 points.
On the last day of the week, DEC 2022 closed at 97.48 with the addition of 334 points.
On the last day of the week, MAR 2023 closed at 93.37 with a sliding of 385points.
LIVERPOOL INDICES
Liverpool Index A was opened at 140.20 with a lower level than the previous week’s closing figure.
In this week’s Index, LPI “A” showed an upward trend in this week and closed on the lower side by the end of the week.
On the last day of the week, LPI “A” closed at 140.60 with a decrease of 04 points.
| Opening of the Week | Closing of the Week | Change | |
| Index A | 140.20 | 140.60 | 0.40 |
PAKISTAN YARN MARKET
The Local yarn market went reducing by following NYCF and the local cotton market. Prices were dropped by Rs.15~20/Lbs. after a descent in NYCF and local cotton limited business. There are stocks & cash flow problems too on the spinner end. Sellers were captivated by selling yarn. About 15 days’ sale is covered whereas buyers are in noticing situations as well. The raw cotton prices in the Global market are followed by NYCF.
PSF prices remained stable in the domestic market during the last week ended. PTA and MEG prices were similarly stable in the international market while crude oil prices also little dived by end of this week. For next week, for next week, prices are projected to remain constant.
Faisalabad’s trading market has shown no activity neither sales of PV/Viscose yarns. Cash flow remains distracted. There is less mandate 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 | 3223 – 3326 | 630 – 650 |
| 20/1 Carded Weaving | 3249 – 3428 | 635 – 670 |
| 30/1 Carded Weaving | 3428 – 3684 | 670 – 720 |
| 20/1 CM | 3812 – 3914 | 745 – 765 |
| 30/1 PC Carded Weaving 52:48 | 2737 – 2967 | 535 – 580 |
| 40/1 Combed Compact Weaving | 4272 – 4374 | 835 – 855 |
| 60/1 Combed Compact Weaving | 5833 – 6037 | 1140 – 1180 |
| 80/1 Combed Compact Weaving | 8237 – 8493 | 1610 – 1660 |
EXPORT YARN MARKET
Export yarn market remained under drastic situation due to continuous drop 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 show another drop in days to come as suppliers are eager to catch orders.
New cotton arrival has been started and suppliers are putting immense efforts to get orders in export and domestic market.
For this, they 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. However, recent crash in cotton prices may give motivation to spinners to book cotton.
Very important issue Pakistan textile industry is facing is the heavy burden of Taxes on Textile industry in addition to hike in Electricity, Gas and Petroleum prices. So, cost of production is not going to show any considerable effect on prices despite of low cotton prices.
Chinese customers remained on side line and no such business activity was witnessed. Customers floated limited number of enquiries just to check the market. No business was concluded.
European customers floated limited numbers of enquiries but firm bids are yet to be closed. We might see order placements in days to come as both customers and suppliers are interested to book some quantities.
| Count | USD / Bale |
| 16/1 Carded Weaving | 716 – 725 |
| 20/1 Carded Weaving | 725 – 734 |
| 16/1 CM | 852 – 864 |
| 20/2 CD | 752 – 762 |
| 24/2 CD | 780 – 790 |
| 10/1 CARDED SIRO YARN WEAVING | 575 – 590 |
PAKISTAN FABRIC MARKET
The local fabric market remained under pressure throughout the week therefore, dull and slow trend prevailed for another week for both and narrow width fabrics.
Inquiries remained thin from both finishers and local brands and resultantly negligible business materialization reported in the market for both narrow and wider width fabrics
Still finishers and local brands opted to remain sidelined as New York cotton future showing week sentiments.
Buyers are still bidding approx 5~6% lower than the asking prices of weavers. Currently, weavers are booked in narrow width looms till early August’22 whereas covered their wider width looms till mid-August’22 and offering onward deliveries.
For coming week, we expect thin business activity for both narrow and wider width fabrics:
| Construction | Price US$/YD Ex Mill |
| 20CDX16CD/128X60 – 63″ 3/1 “S” TWILL PAK CTN | 1.54 – 1.56 |
| 16X12/108X56 63″ 3/1 | 1.71 – 1.73 |
| 20CDX20CD/108X58 63″ 3/1 “S” TWILL PAK CTN | 1.27 – 1.29 |
EXPORT FABRIC MARKET
Slow and dull business activity was seen from Far Eastern markets as customers are still not taking decision of new buying.
Some of the customers from Bangladesh, Korea and China has sent inquiries mainly for price checking only as no business was witnessed.
Asking prices were stable with soft tone due to slow demand in the market as well soft raw material prices.
Good suppliers are booked till mid of Aug and offering end Aug onward deliveries. Some of the suppliers are still offering mid Aug deliveries depending on the quality.
European and USA customers are back from Heimtex fair. They have exchanged some inquiries in the market on which suppliers are working.
We hope to materialize some business during this week mainly in wider width with European customers.
Wider width supplier are keeping their prices stable with soft tone as they are interested to discuss customer’s given reasonable target prices.
Suppliers are booked till mid of Aug and offering end Aug ~ early Sep onward deliveries.
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 | 1.54 – 1.56 |
| 16X12/108X56 63″ 3/1 | 1.70 – 1.72 |
| 20CDX20CD/108X58 63″ 3/1 “S” TWILL PAK CTN | 1.28 – 1.30 |
BED LINEN & TOWELS
Home Textiles Industry is going through a silent spell and overall situation is on declining side, few orders are placed by customers to fulfill their new season requirements but large volume business is not
being placed due to high stock level and Recession around the globe. US big retailers have slowed down their goods lifting from factories and even have cancelled some order quantity.
NYCF had 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. Pak Ruppee is appreciating against US Dollar which will have negative impact on product final 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 and and change of payment mode of factories which is a big concern for the
industry.
GARMENTS
In general, the Pakistani garment sector is busy fulfilling its orders booked in the second quarter of 2022. Initially, the factories were satisfied with the orders received, but later they stopped receiving bookings according to their capacities and expectations. During Covid-19, Pakistan’s garment sector moved towards expansion and increased its dyeing/sewing capacities to meet customer demands as they were oversold during the Covid-19 period. However, due to global inflation and the war between
Ukraine and Russia, the situation changed quickly, and business became very difficult due to reduced demand in the market. On the other hand, the cotton market is very unstable, it fluctuates almost daily, and the customer is very confused when it comes to making large placements and asking for discounts due to the market instability.
As of today, the factories are operating at 50% capacity due to the slow flow of inquiries and lower order
metallization. However, the good thing is that the factories are receiving new developments for FW23 and SS23, which shows a positive mood. However, the factories are fully booked until the end of August and are offering later deliveries.
Many large retailers are going into cancellation and not picking up the stock produced. It has been confirmed from various sources that the influx of customers into the stores is decreasing.
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. The 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 its low prices. Business volume has been very high.
For Local fabric, we expect thin business activity for both narrow and wider width fabrics in coming weeks.
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 market remained slow and dull. Prices were stable with soft tone. It is expected some order
finalization during the coming week mainly with European customers.
The raw materials market is unstable, which directly affects the apparel industry, on the other hand, the overall demand for apparel is falling due to inflation.
For home textile, 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 and change of payment mode of factories which is a big concern for the industry.
