PAKISTAN COTTON MARKET
During the last week in the local cotton market, slow business activity was seen in the local cotton market, due to the downward trend internationally and locally. Moreover, quality of cotton and less demand for yarn were the big reasons behind the slow business activity. Heavy rains and floods, lower Sindh and upper Punjab cotton belt areas damaged the cotton.
Buyers are unable to understand the market situation and it’s still unpredictable, due to the extraordinary fluctuations in prices besides any concrete facts. On the other hand, yarn and finish product demand are very slow worldwide.
In the local cotton market, the price of cotton remained soft and around 2,000~2,500 Rs. per maund drop is observed, it is expected a further drop in the coming days due to the drop of prices internationally. The rate of cotton was Rs 19,000 to Rs 21,000 per maund. The price of Phutti is in between Rs 8,500 and 10,500 per 40 kg. KCA also dropped in this week’s Rs. 3,000 and reached a level of Rs.20,000 per maund.
Economies such as Vietnam, the UK, the US, and the EU have reported raw material shortages which have led to an increase in production costs. The ability of textile firms to fulfill orders is currently undermined by a shortage of input materials, and manufacturers are being forced to place orders months in advance to secure input materials as otherwise, factories have to operate below capacity. The situation has worsened recently as the price of cotton has spiked in Brazil, the US, and India. This has reduced the revenue of manufacturers as it became difficult for them to pass the cost burden to the customers in a short term. Importing goods, including cotton, from China’s Xinjiang region to the US. This has further added to the input costs.
The Outlook stated that U.S. agricultural exports in fiscal year (FY) 2023 are projected at $193.5 billion, down $2.5 billion from the revised forecast for FY 2022. This decrease is primarily driven by lower exports of cotton, beef, and sorghum that are partially offset by higher exports of soybeans and horticultural products.”
Despite high market prices, farmers continue to face higher input costs and inflation that eat into their profit margins.
Unfavorable growing conditions in west Texas are largely responsible for the USDA lowering its estimate of the nation’s cotton production. Those supply concerns are keeping U.S. prices high.
Ending stocks are currently projected at 1.8 million bales, half of what they were last year. Even though supply concerns are pushing prices higher, the demand side is limiting how high prices will get. Recession and interest rate hikes will continue to restrain demand. So far this year, China, Pakistan, and Turkey have been the largest purchasers of the upcoming U.S. cotton crop.
Due to natural disaster of heavy floods, almost half areas of cotton belts suffered badly. It seems Pakistan will get crop around 6 million only, while we were talking about 11 million bales in this season, it’s the big disaster and we may have to import cotton now around 10~11 million which will be higher 3 million from the previous year.
The rate of cotton in Sindh is in between Rs 18,000 to Rs 21,000 per maund. The rate of Phutti as per quality is in between Rs 7,500 to Rs 10,000 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 8,500 to Rs,10,500 per 40 kg. The price of Phutti was in the range of USC 1.01~1.20 Lbs. (18,000~21,000/ maund).
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 107.00 | 106.00 | -1.00 |
| Highest | 129.00 | 120.00 | -9.00 |
CRUDE OIL
Crude Oil prices opened at USD 97.01 a high level compared to last week’s closing figures.
In this week, crude oil prices showed drastic drop in whole week and closed on lower side by the end of
week.
In last day of the week, Crude Oil price closed at USD 86.87 with decrease of USD 10.14 cents as of opening figure of week.
| Opening of Week | Closing Of Week | Change | |
| Price | 97.01 | 86.87 | -10.14 |
EXCHANGE RATE
Last week values of the Pak rupee appreciated 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 1.15 against the USD.
| Selling | Buying | |
| LC Sight | 217.46 | 217.41 |
| LC 120 Days | 211.67 | 211.62 |
| Open Market | 221.14 | 216.27 |
NEW YORK COTTON FUTURE
New York Cotton futures opened with a lower level on Monday as compared to the previous week’s closing figures.
NYCF showed a downward trend this week, while rose in a one-day session but an overall week was on the lower side and closed on the negative side by the end of the week.
On the last day of the week, OCT 2022 closed at 108.39 with an increase of 1363 of points.
On the last day of the week, DEC 2022 closed at 103.21 with an upward of 1395 points.
On the last day of the week, MAR 2023 closed at 100.14 with the rose of 1353 points.
On the last day of the week, MAY 2023 closed at 97.79 with a came up of 1259 points.
LIVER POOL INDICES
Liverpool Index A was opened at 132.25 with the same level as the previous week’s closing figure.
This week’s Index “A” showed mixed sentiment, hence closed on the negative side by the end of the week.
On the last day of the week, LPI “A” closed at 131.60 with a decrease of 65 points.
| Opening of the Week | Closing of the Week | Change | |
| Index A | 132.25 | 131.60 | -0.65 |
PAKISTAN YARN MARKET
The Local yarn market remained firm followed by the local cotton market. The limited business was seen. Yarn Prices went up by Rs.15~20/Lbs. from the start of the week due to local cotton augmented and however NYCF dropped by end of this week. Mills are carrying stocks and curtailing production. Buyers are slow in demand & activity and have limited sales settled. The raw cotton prices in the Global market are followed by NYCF.
PSF prices stayed stable in the domestic market during the last week ended. PTA and MEG prices were similarly descending in the international market while crude oil prices were also weakening 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 constant as well.
Faisalabad trading market was again slow and limited activity was seen. The yarn was less in demand Limited sales of PV and Viscose yarns were reported. The cash flow crunch remains thoughtful. Traders were in selling their stocks and loom owners were in a challenging position in yarn buying due to an increase in electricity and other outlays.
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 | 3425 – 3534 | 630 – 650 |
| 20/1 Carded Weaving | 3534 – 3670 | 650 – 675 |
| 30/1 Carded Weaving | 3833 – 3996 | 705 – 735 |
| 20/1 CM | 4159 – 4240 | 765 – 780 |
| 30/1 PC Carded Weaving 52:48 | 2800 – 2909 | 515 – 535 |
| 40/1 Combed Compact Weaving | 4675 – 4784 | 860 – 880 |
| 60/1 Combed Compact Weaving | 6007 – 6225 | 1105 – 1145 |
| 80/1 Combed Compact Weaving | 8508 – 8617 | 1565 – 1585 |
EXPORT YARN MARKET
The export yarn market remained in silent mode for another week in a row.
Cotton prices in the international and domestic markets showed slide but that didn’t help any reduction in yarn prices.
There has been serious cotton damage in Pakistan due to historical high floods. However, spinners are now closing their factories due to heavy losses.
At the moment, yarn prices are extremely low and suppliers are not even able to meet their costs. So, most of the suppliers even with strong financial muscles are closing their factories as losses are huge.
Only possibility is that cotton prices show a drop of a further 10-15% along with good demand for yarns from the other side. That will meet the equation and suppliers will re-start their productions.
Chinese customers remained silent throughout the weak and no such business was confirmed.
Customers are still resisting high prices and not increasing their bids. Chinese domestic market is very weak and customers are using local yarn despite importing Yarn at higher prices.
European customers floated a limited number of inquiries as they are just back from holidays. They understand market and placements are expected to be done in mid of September.
| 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 – 680 |
| 24/2 CD | 710 – 720 |
| 10/1 CARDED SIRO YARN WEAVING | 525 – 545 |
PAKISTAN FABRIC MARKET
In current week under review the local fabric market slow and week closed with limited trading activity for another week for both narrow and wider width fabrics.
Local finishers increased flow of inquiries but due to lower bids, weavers could not materialize available orders and resultantly week closed with limited business materialization for both narrow and wider width fabrics.
Weavers increased their asking prices due to increase in yarn prices from spinners.
Weavers still seem under pressure to capture available orders and following agents and buyers for orders.
Currently, weavers are booked in narrow width till end September’2022 and wider width looms till early
October ~ Mid October’22 and offering onward deliveries.
| Construction | Price US$/YD Ex Mill |
| 20CDX16CD/128X60 – 63″ 3/1 “S” TWILL PAK CTN | 1.52 – 1.54 |
| 16X12/108X56 63″ 3/1 | 1.67 – 1.69 |
| 20CDX20CD/108X58 63″ 3/1 “S” TWILL PAK CTN | 1.25 – 1.27 |
EXPORT FABRIC MARKET
Slow market sentiment was observed from all of the Far Eastern markets.
Customers have discussed limited number of inquiries however no considerable business was witnessed.
Asking prices get firm due to high raw material prices.
Suppliers are chasing their customers but due to slow demand, customers are not sharing their feedback
against offered prices.
US Dollar is still strong against Pak Rupees.
Limited number of inquiries were received from European markets thus limited business was also observed.
European markets will properly resume from early of Sep and suppliers are very optimistic that customers will start placing orders because they postponed their buying before summer holidays.
USA market remained quite during the week due to recession.
Wider width suppliers are chasing every inquiry due to less orders in hand. They are trying to offer attractive offers to extend their sales however customers are still not showing interest of buying at the moment.
Suppliers are offering end Oct onward deliveries for wider width fabric.
Following were the closing rates based on CNF Far Eastern ports.
| Construction | Price US$/YD CNF Far East |
| 20CDX16CD/128X60 – 63″ 3/1 “S” TWILL PAK CTN | 1.52 – 1.54 |
| 16X12/108X56 63″ 3/1 | 1.66 – 1.68 |
| 20CDX20CD/108X58 63″ 3/1 “S” TWILL PAK CTN | 1.25 – 1.27 |
BED LINEN & TOWELS
Home Textiles overall business situation is slow and new business opportunities has decreased in recent
weeks. It is expected that this trend continues till end of September and some business activity is expected later this month / early October.
Demand is lower side around the globe which is affecting business volume in Pakistan, also other
neighboring regions (especially India) are offering aggressive price options.
Prices are also not stable due to fluctuation in Cotton and Yarn prices, many factories are closing their part operations to minimize the overhead costs.
There is a financial crunch in industry and it is also effecting payments transition, it is badly hurting small factories and this can cause closure of factories.
GARMENTS
We have seen slow activity in the garment industry in recent weeks, many factories are reportedly reducing their production capacity and global inflation has impacted factories in general due to lower demand and cancellations.
To date, the factories are working at 60% capacity and are waiting for more orders to keep them running, due to the fluctuations in the cotton and yarn market, the factories are confused about the supply, and on the other hand, the customers are also in wait and see condition until the market stabilized.
On the other hand, factories have already received bulk orders for SS23 from different brands, and going
forward, they have received FW23 Development for next season, which bodes well for Pakistan’s textile
industry. The factories are booked until the end of October/mid-November and will be offered afterward.
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 upcoming market, it is assessed that yarn prices will lead to local cotton prices and international trends of NYCF, and demand from the end users. Further price liking will be according to the market and supply of different yarn counts, leading to the price level.
In this week, a worldwide drop was seen internationally in terms of prices and demand. Therefore, the local market also behaved the same. It seems that prices will remain soft in the coming days due to less demand and damage to cotton quality with ginners.
For coming weeks, we expect slow sentiments to prevail for both narrow and wider width fabrics in domestic fabric market.
The export yarn market showed lackluster business activity due to the wide gap between cotton prices and yarn sales prices. Most of the suppliers are closing their operations and very limited offers were furnished. We might see good order placements in September once things are settled slightly.
Export fabric market remained slow and quite during the week. Prices get firm due to increase in raw material prices. Suppliers are optimistic to have some good orders in days to come both from Far Eastern and European markets.
Overall garment industry observed slow activity in the market due to inflation and fluctuating textile raw
materials.
