PAKISTAN COTTON MARKET
During the last week in the local cotton market, by the start of the week good activity was seen due to
increasing prices internationally, hence after mid of week prices showed a downward trend due to which activity came down. Buyers are not in panic and waiting for the drop in prices because of the slow demand for yarn worldwide. Rumors of the shortfall of cotton worldwide put negativity and uncertainty among the buyers, on the realistic ground yarn demand is very slow.
In the local cotton market, the price of cotton showed an upward trend trailed by international cotton prices, which showed an increase around 2000~2500 per maund, hence later after mid of week prices showed softness and reduced around 1000 rs per maund. The rate of cotton was Rs 18,500 to Rs 21,000 per maund. The price of Phutti is in between Rs 6,500 and 10,000 per 40 kg. KCA also rose in this week’s rs. 2,000 in and reached the level of Rs.20,500 per maund.
Last week’s USDA August forecasts for the 2022 crop year trimmed the crop by almost 3 million bales. This magnitude of reduction was unexpected. Dec futures stand today at 113.59. Prices could continue to move higher with “resistance” around $1.18. As we saw with the previous run-up, speculative interests can move the market to levels not supported by supply and demand fundamentals, eventually subject to adjustment.
Going forward, our attention should also be on other factors that will come into play that have been pushed to the background for now. In last week’s USDA report, World Use/demand for the 2022 crop year was reduced once again—this time by 830,000 bales.
The United States is expected to harvest its lowest number of cotton acres since the 19th century, according to an estimate from the U.S. Department of Agriculture.
USDA projected this year’s harvested acres at 7.13 million, which would be the lowest since 1868. USDA’s Aug. 12 report projected that about 43 percent of U.S. planted cotton acres are expected to be abandoned this year, largely due to the extreme drought conditions in the southwest region, which includes Texas, Oklahoma, and Kansas.” Texas was particularly hard hit by drought this year.
The rate of cotton in Sindh is between Rs 18,500 to Rs 20,500 per maund. The rate of Phutti as per quality is in between Rs 7,000 to Rs 9,500 per 40 kg. In Punjab province, the price of cotton was Rs 19,000 to Rs 21,000 per maund, and the price of Phutti was Rs 7000 to Rs,10,000 per 40 kg.
The price of Phutti was in the range of USC 1.05~1.18 Lbs. (18,500~21,000/ maund).
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 97.00 | 105.00 | 8.00 |
| Highest | 114.00 | 118.00 | 4.00 |
CRUDE OIL
Crude Oil prices opened at USD 89.41 with a lower level as compared to last week’s closing figures.
In this week, crude oil prices dropped in the next session, later showing an upward tendency, hence
dropped on closing and closed on the upper side by the end of the week.
On the last day of the week, Crude Oil prices closed at USD 90.77 with an increase of USD 1.36 as of the
opening figure of the week.
| Opening of Week | Closing Of Week | Change | |
| Price | 89.41 | 90.77 | 1.36 |
EXCHANGE RATE
Last week values of the Pak rupee deprecated against 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 negative note with a figure of 1.00 and British Pound also
closed on a negative note with a figure of 1.18 against the USD.
| Selling | Buying | |
| LC Sight | 213.53 | 213.48 |
| LC 120 Days | 205.50 | 205.45 |
| Open Market | 217.55 | 212.75 |
NEW YORK COTTON FUTURE
New York Cotton futures opened with a higher level on Monday as compared to the previous week’s closing figures.
NYCF marched next upward side in next two sessions later showed a downward trend, hence recovered again on closing and closed on the positive side by the end of the week.
On the last day of the week, OCT 2022 closed at 119.75 with an increase 31 of points.
On the last day of the week, DEC 2022 closed at 116.01 with upward of 242 points.
On the last day of the week, MAR 2023 closed at 112.84 with arose of 220 points.
On the last day of the week, MAY 2023 closed at 105.20 with a decrease of 367 points.
LIVER POOL INDICES
Liverpool Index A was opened at 126.75 with a higher level than the previous week’s closing figure.
This week’s Index, “A” showed an upward trend in this week and closed on the positive side by the end of the week.
On the last day of the week, LPI “A” closed at 131.65 with an increase of 490 points:
| Opening of the Week | Closing of the Week | Change | |
| Index A | 126.75 | 131.65 | 4.90 |
PAKISTAN YARN MARKET
The Local yarn market went plunging following NYCF and the local cotton market. The market remains to tumble following NYCF and the local cotton market. After a lineage in NYCF and local cotton, the restricted business was seen. Spinners are facing high energy costs and shutdown hitches. Mills are carrying stocks and mostly closing productions and managing as per requirement. Whereas buyers are in perceiving situations & the raw cotton prices in the Global market are followed by NYCF.
PSF prices were declined by Rs.25/kg dated 15th August 2022 by IFL in the domestic market. PTA and MEG prices were similarly descending in the international market while crude oil prices were unwavering by end of this week. For next week, PSF prices are expected to decrease by Rs.3~5/kg & yarn rates of PC/CVC remain depressed as well.
Faisalabad’s trading market has shown no bustle. Limited sales of PV and Viscose yarns were reported. The 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 intransigent 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 | 3016 – 3096 | 565 – 580 |
| 20/1 Carded Weaving | 3043 – 3256 | 570 – 610 |
| 30/1 Carded Weaving | 3256 – 3470 | 610 – 650 |
| 20/1 CM | 3657 – 3763 | 685 – 705 |
| 30/1 PC Carded Weaving 52:48 | 2536 – 2749 | 475 – 515 |
| 40/1 Combed Compact Weaving | 4057 – 4164 | 760 – 780 |
| 60/1 Combed Compact Weaving | 5605 – 5765 | 1050 – 1080 |
| 80/1 Combed Compact Weaving | 7901 – 8141 | 1480 – 1525 |
EXPORT YARN MARKET
The export yarn market remained silent due to clouds of uncertainty around the globe.
Cotton prices in the international and domestic markets show an upward trend.
Moreover, USD against PKR kept on getting weak which also put impacted export yarn prices.
Suppliers increased their prices by 3-5% depending upon counts and their sale position. Suppliers are expecting betterment in days to come in the line with cotton prices.
However, customers remained on the sideline and no considerable business was finalized. Customers’ target prices are still the same and they are not showing any aggressive mode to buy yarns.
Cotton crop damage is estimated to be big due to recent floods and viruses in fields. So, local cotton prices are continuously on the rise.
The spinning sector is going through a critical phase as cotton prices are sky high and still on the rise but they are unable to sell yarns with parity of cotton prices. Current Yarn prices are causing them heavy losses which have forced some suppliers to close their production by 30-50% depending on their financial situation.
So, if cotton prices remained firm and yarn remained weak, many factories might be closed in days to come.
Chinese customers remained silent through the weak and no such business was confirmed. Customers are still resisting high prices and not increasing their bids.
European customers floated a limited number of inquiries against which business was minimal. Customers are on holiday and all eyes are on September once customers are back from their holidays.
| Count | USD / Bale |
| 16/1 Carded Weaving | 585 – 595 |
| 20/1 Carded Weaving | 595 – 605 |
| 20/1 CM | 635 – 645 |
| 16/1 CM | 625 – 635 |
| 20/2 CD | 670 – 675 |
| 24/2 CD | 710 – 720 |
| 10/1 CARDED SIRO YARN WEAVING | 490 – 510 |
PAKISTAN FABRIC MARKET
In the current week under review, the local fabric market remained slow throughout the week for both narrow and wider width fabrics.
Finishers shared limited inquiries due to the uncertain situation prevailing in local and international cotton markets, resultantly negligible business reported in a current week for both narrow and wider width fabrics.
Weavers increased their asking price due to an increase in yarn prices. Buyers are bidding very low which is approximately 6% ~ 8% against offers due to which weavers were unable to confirm orders.
Weavers are under pressure and following floating orders. Currently, suppliers booked in narrow width till early September ~ mid-September 2022 whereas they have coverage of their wider width looms till end Sep ~ Mid October and offering onward deliveries.
| Construction | Price US$/YD Ex Mill |
| 20CDX16CD/128X60 – 63″ 3/1 “S” TWILL PAK CTN | 1.48 – 1.50 |
| 16X12/108X56 63″ 3/1 | 1.63 – 1.65 |
| 20CDX20CD/108X58 63″ 3/1 “S” TWILL PAK CTN | 1.23 – 1.25 |
EXPORT FABRIC MARKET
Slow market sentiment was witnessed from Far Eastern markets during the week under review.
Customers are not taking an interest in new buying because of slow demand from their end customers.
Indian and Korean suppliers are operating about 60~70% of their production due to fewer orders in hand as well as keeping old stocks.
Asking prices further increased by about 3~4% due to firm yarn sentiment as well as the increase in raw
material prices and the upward trend of NYCF.
Suppliers are booked till early of Sep and offering mid-Sep ~ 3rd Sep onward deliveries.
The local currency was almost table against the USD during this week.
A limited number of inquiries were received from European and USA buyers due to recession all around the globe.
The limited order placement was seen from a few of the European customers for urgent orders only.
Wider width suppliers are aggressively following up on every inquiry.
Asking prices remained stable and firm during this week.
Suppliers are booked till the end of Sep and offering onward deliveries.
Following were the closing rates based on CNF Far Eastern ports.
| Construction | Price US$/YD CNF Far East |
| 20CDX16CD/128X60 – 63″ 3/1 “S” TWILL PAK CTN | 1.48 – 1.50 |
| 16X12/108X56 63″ 3/1 | 1.66 – 1.68 |
| 20CDX20CD/108X58 63″ 3/1 “S” TWILL PAK CTN | 1.22 – 1.24 |
BED LINEN & TOWELS
Home Textiles’ overall situation is slow as inquiry flow has decreased around the globe, and new order
placements are also on the decline. Factories are facing cancellation of orders and slow lifting is
impacting the cash flows as well as their production lines.
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 as demand is decreased all around the globe due to the
worldwide recession.
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
In general, Pakistan’s garment industry has shown positive sentiment, in the previous month many
factories faced a lack of orders and approached 50% capacity. However, customers are returning to orders and are starting to place them, which has led to a positive mood in the market. Accepting orders for apparel will also support Pakistan’s spinning and knitting house.
Presently, factories are booked till End September 22 and offering deliveries onward. Inquiry flow is getting better, the only hurdle is yarn instability and fibers.
On the other hand, factories have already received bulk orders for SS23 from various brands, and for the future, they have placed FW23 Development for next season which is a healthy sign for the Pakistan apparel industry.
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.
GLOBAL NEWS
China’s Yangtze River is running dry amid scorching temperatures: China is suffering its worst drought
on record as soaring temperatures dry up key parts of the Yangtze River, damaging crops and limiting
drinking-water supplies in some rural communities. The hardest-hit regions are in China’s central and
southern provinces, where a prolonged heat wave has exacerbated drought conditions. ~The
Washington Post~
China faces power cuts amid a record heat wave: China is scrambling to alleviate power shortages and forced industries in the hydropower-dependent regions of the southwest to shut down to ensure electricity supplies for homes. ~Returns~
Walmart execs announce ‘billions of dollars in canceled orders, as the retailer wrestles with excess
inventory: Walmart Inc. said Tuesday that it has canceled billions of dollars in orders as part of a
continued effort to align inventory levels with the projected demand and to reduce its exposure to
certain products that have fallen out of favor with budget-conscious consumers. ~Freight Waves~
GOING FORWARD
About the upcoming market, it is appraised that local yarn prices will drive local cotton prices and international trends of NYCF, and demand from the end consumers. Further price liking will be according to the demand and supply of different yarn counts which will lead to the price level.
At the week start of the week cotton worldwide showed an upward trend in subsequent shortage of cotton news. Although, after mid of weak trend was seen. Activity remained slow due to the slow demand for yarn worldwide. It seems that buyers will wait to drop cotton prices as they are not in hurry. This factor may drop the prices in the coming days it is expected if international cotton doesn’t tricky.
The local fabric market remained slow during the week. Customers are bidding about 6~8% which was not possible to manage by the suppliers. It is expected that the market may remain slow with limited trading activity.
The export yarn market showed dull business activity due to a hike in cotton prices in domestic and
international markets. Suppliers increased their prices in line with cotton prices but unfortunately, customers didn’t respond positively and no such deals were closed.
The fabric market remained slow during the week due to less demand around the globe. Asking prices further increased about 3~4% due to an increase in cotton prices and the upward trend of NYCF. Suppliers are optimistic to have betterment in business from Sep onward.
We have seen Pakistan’s garment industry recovering after a rough patch and it looks set to pick up again, prompting us to stabilize our spinning and knitting houses.
Following are some of the important points for the existing market situation:
• Oversupply after covid.
• Customers are still keeping stocks with them which are moving very slowly.
• Retails business is very slow hence customers are unable to release their stocks.
• End customers will start buying only when they reduce their existing stocks.
• Cotton prices may remain strong during this season as cotton damage is due to floods in Pakistan,
India, and draught in the USA.
