PAKISTAN COTTON MARKET
During the last week in local cotton market, moderate business activity was seen on same price levels. Heavy rains and devastating floods have caused extraordinary damage to the cotton crop in the country, due to which cotton production in the country is expected to be around 65 lac bales, while many textile mills are closed and many mills are partially operational due to which demand will also be decreased. Most of the buyers were focusing on import of cotton and 45 lakh import bales were signed.
It may be difficult to sell cotton at the end of the season because the quality of local cotton is relatively low and the price of cotton is not suitable for the mills due to which textile mills are signing contracts for the import of cotton in large quantity from foreign countries.
In the local cotton market, the price showed slightly downward trend due the low quality and absence of buyers. The rate of cotton was Rs 17,000 to Rs 20,000 per maund. The price of Phutti is in between Rs 6,500 and 95,00 per 40 kg. KCA also dropped rs. 13000 and came at the level of Rs.17,500 per maund.
Strong fall in the demand and price of cotton yarn in the local yarn market, export orders for textile products have slowed down due to the recession in the international markets, especially in Europe and America, the largest importer of textile products. Due to the slow down textile sector is in crisis in many countries. More than half of the textile and related sectors are closed. There is a huge financial crisis in the markets.
Aside from the failure of demand, the bearish news comes in the form of increasing open interest in a time of falling prices. This is a bearish price indicator. The U.S. dollar is trading at a 20-year high to most currencies, meaning that U.S. commodities are more expensive in relative terms.
The 2022/23 U.S. cotton supply and demand estimates show slightly lower exports and higher ending stocks compared with last month. Production is virtually unchanged at 13.8 million bales, less than 1 percent lower than a month earlier.
With world trade projected lower, the export forecast is 100,000 bales lower at 12.5 million bales, while ending stocks are 100,000 bales higher. The 2022/23 season-average price for upland cotton is forecast at 90.0 cents per pound, 6 cents lower than last month and slightly below the final 2021/22 record-high price of 91.4 cents. In the 2022/23 world balance sheet this month, consumption is 3.0 million bales lower and ending stocks are 3.1 million bales higher. China’s historical consumption estimates are revised back to 2019/20, with the largest change in 2021/22, which is revised down 2.0 million bales. China’s projected 2022/23 consumption is 1.0 million bales lower this month, as is India’s. Pakistan’s is 500,000 bales lower, and consumption is also lower for Turkey, Mexico, and Vietnam. World trade is projected nearly 1 million bales lower than it was in September, with declines in imports by China, Pakistan, Mexico, Turkey, and Vietnam. Exports are lower for Australia, Brazil, India, Benin, Cote d’Ivoire, Greece, and Mexico, as well as the United States. World production in 2022/23 is projected nearly 400,000 bales lower than it was a month ago, largely reflecting lower crops in Pakistan and Benin. Indian spot prices fell by 30 cents but remain the highest among the observed origins. This is contrary to last year when India prices were the lowest among major producers; far lower supplies in
the country relative to the previous year are supporting the stronger basis.
The rate of cotton in Sindh is in between Rs 16,500 to Rs 19,000 per maund. The rate of Phutti as per quality is in between Rs 6,500 to Rs 8,500 per 40 kg. In Punjab province, the price of cotton was Rs 17,000 to Rs 20,000 per maund, and the price of Phutti was Rs 7,500 to Rs,9,500 per 40 kg.
The price of Phutti was in the range of USC 0.92~1.12 Lbs. (16,500~20,000/ maund). It seems that, it may be difficult to sell cotton at the end of the season because the quality of local cotton is relatively low and the price of cotton is not suitable for the mills due to which textile mills are signing contracts
for the import of cotton in large quantity from foreign countries. Hence, worldwide rescission hitting the major economies and demands are slow.
|Opening Of the Week||Closing Of the Week||Change|
Crude Oil prices opened at USD 91.13 a higher level compared to last week’s closing figures.
In this week, crude oil prices marched downward thought the week and closed on the lower side by the end of the week.
On the last day of the week, Crude Oil prices closed at USD 85.61 with a decrease of USD 5.52 cents as of the opening figure of the week.
|Opening of Week||Closing Of Week||Change|
In the last week values of the Pak, the rupee appreciated against US Dollar, and other significant 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 0.97 and British Pound closed on a positive note with a figure of 1.12 against the USD.
|LC 120 Days||208.71||208.66|
NEW YORK COTTON FUTURE
New York Cotton futures opened higher on Monday compared to the previous week’s closing figures.
NYCF rose further in the next session, later marched downward until the closing, and closed on a downward trend by the end of the week.
On the last day of the week, DEC 2022 closed at 83.15 with a decrease of 508 points.
On the last day of the week, MAR 2023 closed at 81.99 with a drop of 467 points.
On the last day of the week, MAY 2023 closed at 81.00 with a lower of 451 points.
On the last day of the week, JUL 2023 closed at 79.85 with a surge of 407 points.
LIVER POOL INDICES
Liverpool Index A opened at 101.30 a lower level than the previous week’s closing figure.
In this week’s Index, “A” showed an upward trend, hence dropping on the last session but closing on the
positive side by the end of the week.
On the last day of the week, LPI “A” closed at 102.65 with an increase of 135 points.
|Opening of the Week||Closing of the Week||Change|
PAKISTAN YARN MARKET
The local yarn market stayed slow in demand & business following local cotton and fall in NYCF. Yarn prices plunged by Rs.6~10/lbs. in 100% cotton & Rs.4~5/lbs. in PC/CVC yarns. Sellers were under a sale burden. Ready stocks were obtainable on some counts. Buyers booked only essential yarn. Whereas buyers are in distinguishing positions & NYCF follows the raw cotton prices in the Global market.
PSF prices were decreased by Rs.5/kg dated 10th Oct 2022 by IFL in the domestic market. PTA and MEG prices remain soft in the international market plus the weakening of the US $ parity effect in Pak rupees on importing fiber. At the same time, crude oil prices were inflexible and uplifted by the end of this week. For next week, PSF prices are expected to decrease by Rs.4~5/kg.
Faisalabad trading market was unhurried and limited movement was seen. The yarn was less in demand short sales of PV and Viscose yarns were reported. The cash flow crisis remains considerate. At the same time, Traders were persuasive with their stocks & management.
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||3282 – 3364||605 – 620|
|20/1 Carded Weaving||3391 – 3472||625 – 640|
|30/1 Carded Weaving||3554 – 3798||655 – 700|
|20/1 CM||3744 – 3906||690 – 720|
|30/1 PC Carded Weaving 52:48||2794 – 2903||515 – 535|
|40/1 Combed Compact Weaving||4259 – 4449||785 – 820|
|60/1 Combed Compact Weaving||5588 – 5941||1030 – 1095|
|80/1 Combed Compact Weaving||8274 – 8382||1525 – 1545|
EXPORT YARN MARKET
The export yarn market remained dull and slow due to a lack of demand globally.
Customers floated good numbers of inquiries against which order materialization was almost nil.
Cotton prices in the international market remained under pressure which put impacted Pakistan prices as well.
An estimate of the USDA cotton report regarding the shortage of consumption of cotton by 3 Million bales will keep the cotton price under pressure.
It is expected that business activity will pick up in days to come as customers are now sharing some firm demands and prices are under negotiation with suppliers. So, we might see placements after negotiations of prices.
At the same time, slow demand from exporting countries is kept yarn prices under pressure.
In Pakistan, after the closure of many spinning mills, yarn supply is short due to which customers are buying available quantities to fulfill their orders.
Chinese customers remained on the sideline as very limited business activity was witnessed.
European customers floated a good number of inquiries. Some orders in normal and specialized yarns were also matured.
|Count||USD / Bale|
|16/1 Carded Weaving||565 – 575|
|20/1 Carded Weaving||575 – 585|
|20/1 CM||625 – 635|
|16/1 CM||615 – 625|
|20/2 CD||655 – 665|
|24/2 CD||695 – 705|
|10/1 CARDED SIRO YARN WEAVING||520 – 535|
PAKISTAN FABRIC MARKET
In current week under review the local fabric market remained silent and slow for another week for both
narrow and wider width fabrics.
Finishers did not show interest in buying and opted to stay sideline throughout the week. Weavers received limited inquiries with limited quantities Resultantly dull and limited business materialization reported in the market for both narrow and wider width fabrics.
Some of the brands are pushing dyeing units to offer prices at same level of year 2020 which is quite difficult task.
Weavers are showing their desperation in getting orders and following buyers for orders and any reasonable bid in order to keep their looms in running.
Currently, weavers are booked in narrow width till end October and covered their wider width looms till early November’22 and offering onward deliveries. Weavers have booked their special looms till end November.
|Construction||Price US$/YD Ex Mill|
|16CDX12CD / 108X56 – 63″ 3/1 “S” TWILL PAK CTN||1.70 – 1.72|
|20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN||1.55 – 1.57|
|20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN||1.26 – 1.28|
EXPORT FABRIC MARKET
Demand is not picking up from Far Eastern and Asian countries however limited number of inquiries were exchanged to check the market.
Some of the Korean customers are cancelling orders habitually with their suppliers which cause further un pleasant situation in the market.
Suppliers are struggling hard to get orders however at the same time, they are very concern to discuss orders with only reliable customers especially in Korean market.
Although yarn prices were little bit soft however fabric prices were stable due to strong Pak currency
Suppliers are booked their orders for next 2~3 weeks only whereas some suppliers have open production space for immediate production.
Some of the supplier have partially stop their looms as they have no sufficient orders to run their all looms.
Limited inquiries were received from European customer resultant negligible business was reported in basic items.
Few of the USA customers have exchanged their inquiries but no business was witnessed.
Wider width fabric suppliers are offering very aggressive prices but even then customers are taking long time to consider offers.
Suppliers are booked for next 2~3 weeks in wider width as well and offering onward deliveries.
Following were the closing rates based on CNF Far Eastern markets:
|Construction||Price US$/YD CNF Far East|
|16CDX12CD / 108X56 – 63″ 3/1 “S” TWILL PAK CTN||1.70 – 1.72|
|20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN||1.56 – 1.58|
|20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN||1.28 – 1.30|
BED LINEN & TOWELS
Home Textiles all indicators are on slower side and new business are very limited in recent weeks. We are forecasting that this trend will continue till early next year but it is expected that business activity will slightly improve in November.
Overall demand is on slower side around the globe which is affecting business volume in Pakistan and as well as other regions around the globe which supply Home Textile products.
Prices are also not stable due to fluctuation in Dollar, Cotton and Yarn prices, many factories are closing their part operations to minimize the overhead costs. Factories are offering aggressive prices to capture all opportunities in hand whereas customer targets are getting tough day by day.
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 Q4 Development for next season, which bodes well for Pakistan’s textile industry. The factories are booked until Mid-November and offering delivery 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.
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.
For coming week, we expect dull business activity to continue for local fabric as no sector of textile is showing interest in buying. Export yarn market remained under lethargic business activity as customers didn’t much interest to place orders. Limited buying was witnessed only where customer got their desired price levels. Suppliers are quite flexible and discuss each and every bid to conclude possible business.
Export fabric market remained slow and dull. Some of the Korean customers are cancelling their orders
habitually due to slow market sentiment. This impact on their reliability for future orders. Prices were stable during the week. It is expected that demand will rise after couple of weeks.
The garment industry is receiving minimal orders from different regions and observed low buying sentiments globally, which eventually hurt the local factories. The buying situation clears by end of 2022 after the Christmas holiday.