PAKISTAN COTTON MARKET
During the last week in the local cotton market, slow business activity was seen as buyers didn’t show interest despite that international prices took a big jump. It is too early to say that market will drive further upward as marched last week. So overall didn’t change customer behavior so far due to slow demand.
Ginners have a stock with them and facing a continuous loss due to the downward market sentiments and absences of buyers. They have had an old stock with higher prices with them.
In the local cotton market, the price showed firmness this week although a slightly upward trend was also observed, the price rose from 500 to 1000 in this week above. The rate of cotton was Rs 14,500 to Rs 17,000 per maund. The price of Phutti is between Rs 5,000 and 8,000 per 40 kg. KCA increased rs. 700 and came at the level of Rs.16,700 per maund.
Seed cotton (Phutti) equivalent to over 3.7 million or exactly 37,07693 bales has reached ginning factories across the country till November 1, 2022, with a decrease of 40.74 percent as compared to the corresponding period of last year. over 3.5 million or 3,521,792 bales have undergone the ginning process i.e., converted into bales.
Cotton arrivals in Punjab were recorded at over two million or 2,072,293 bales registering a decrease of 29.40 percent as compared to the corresponding period of last year when arrivals were recorded at 2,935,119 bales.
Sindh generated over 1.6 million or 1,635,400 bales registering a decrease of 50.77 percent as compared to the corresponding period of last year when arrivals were recorded at 33,21,900 bales. Cotton arrival declines 24% year-on-year due to devastating floods. Textile mills bought 3,036,129 bales while exporters purchased 4,900 bales and the Trading Corporation of Pakistan (TCP) didn’t buy during the cotton season 2022-23. Sanghar district of Sindh topped with a cotton arrival figure of 795,447 bales followed by the Bahawalnagar district of Punjab with 375,048 bales. Exactly 666,664 cotton bales of unsold stock were available in ginning factories.
Cotton futures moved towards the 80 USD/Lbs mark as dip buyers emerged to blunt a massive selloff that sent the commodity to a near 22-month low of 71.6 last month. Still, prices remained about 50% down from their May peak, pressured by a stronger dollar and lingering demand concerns due to challenging economic conditions. On the supply side, the latest report from the US Department of Agriculture indicated global cotton production is forecast at 118.1 million bales in 2022/23, 2% above the previous year, as both area and yield increased. The higher output is mainly attributable to India, Brazil, and China, which offset reductions from the United States and Pakistan.
In China this year, the market cotton price has fallen sharply, affected by the tightening of global monetary policy and downstream consumption shrinkage, cotton prices fell from 22,000 Yuan/ton of
historical highs to 13,000-14,000 Yuan/ton in just half a year. Accompanied by a sharp decline in cotton prices, this year the ginning factories focus on risk prevention, and once the purchase price rose too high, they reduced or even stop purchasing to wait and see. At present, Xinjiang cotton is in the peak period of picking, delivery, and processing, and the sales volume of new cotton is limited.
The rate of cotton in Sindh is between Rs 14,000 to Rs 16,000 per maund. The rate of Phutti as per quality is between Rs 5,000 to Rs 6,500 per 40 kg. In Punjab province, the price of cotton was Rs 14,500 to Rs 17,000 per maund, and the price of Phutti was Rs 6,000 to Rs,8,000 per 40 kg.
The price of Phutti was in the range of USC 0.80~0.93 Lbs. (14,500~17,000/ maund).
|Opening Of the Week||Closing Of the Week||Change|
Crude Oil prices opened at USD 86.53 a lower level as compared to last week’s closing figures.
This week, crude oil prices showed mix trend in this week, while closing on the positive side by the end.
On the last day of the week, Crude Oil prices closed at USD 92.61 with an increase of USD 6.08 as of the opening figure of the week.
|Opening of Week||Closing Of Week||Change|
Last week value of the Pak rupee depreciated against US Dollar, 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 0.98 and British Pound also closed on a negative note with a figure of 1.14 against the USD.
|LC 120 Days||211.88||211.83|
NEW YORK COTTON FUTURE
New York Cotton futures opened at a lower level on Monday as compared to the previous week’s closing figures.
NYCF marched upward for a whole week and closed on the upper side by the end of the week.
On the last day of the week, DEC 2022 closed at 86.93 with an increase of 1493 points.
On the last day of the week, MAR 2023 closed at 85.67 with a rose of 1403 points.
On the last day of the week, MAY 2023 closed at 84.63 with an upward of 1278 points.
On the last day of the week, JUL 2023 closed at 83.26 with a surge of 1128 points.
LIVER POOL INDICES
Liverpool Index A opened at 92.50 at the same level as the previous week’s closing figure.
In this week Index “A” dropped in the next session, hence later rose till the end and closed on the positive side by the end of the week.
On the last day of the week, LPI “A” closed at 96.20 with an increase of 370 points.
|Opening of the Week||Closing of the Week||Change|
PAKISTAN YARN MARKET
The local yarn market remains soft and stable in asking prices by end of this week following NYCF and the local cotton market. Limited sales were made. No bulk inquiries were seen from the end customer.
Spinning mills were carrying stocks and under the sale burden, stocks were offered on significant counts by spinners and had cash flow problems. Sellers were eager to sell the yarn whereas buyers are in quiet positions & NYCF follows the raw cotton prices in the Global market.
PSF prices were decreased by Rs.5/kg dated 31st Oct 2022 by IFL in the domestic market. PTA and MEG prices remain indulgent in the international market plus the decreasing of the US $ parity effect in Pak rupees on importing fiber. At the same time, crude oil prices continued to be inflexible by the end of this week. For next week, PSF prices are expected to decline by Rs.2~3/kg.
Faisalabad trading market was inactive and restricted business was seen. The yarn was not as much in demand and had no substantial sales of PV and Viscose yarns. The cash sequence adversity remains considerate. At the same time, traders were swaying with their stocks.
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||2895 – 3005||525 – 545|
|20/1 Carded Weaving||3061 – 3171||555 – 575|
|30/1 Carded Weaving||3198 – 3391||580 – 615|
|20/1 CM||3584 – 3640||650 – 660|
|30/1 PC Carded Weaving 52:48||2592 – 2730||470 – 495|
|40/1 Combed Compact Weaving||3888 – 3998||705 – 725|
|60/1 Combed Compact Weaving||5294 – 5487||960 – 995|
|80/1 Combed Compact Weaving||8189 – 8410||1485 – 1525|
EXPORT YARN MARKET
The export yarn market remained dull and slowed business activity. Customers floated good numbers of inquiries but order materialization was very slow. Cotton prices in the international market remained bullish and showed an increase of more than 12% in just one week.
This has given confidence to suppliers and they have increased their prices. At the same time, some business was also concluded with improved prices from buyers.
Customers were holding their buying for the last couple of weeks in anticipation of further decline in prices.
However, after this sudden and abrupt increase in cotton prices, now customers are back and started to place orders.
If we analyze the overall market situation, it seems that now prices will get better and customers will start to place orders slowly and gradually.
Suppliers are still in aggressive mode but in a firm tone due to the cotton hike. Customers are now sharing some firm demands and prices are under negotiation with suppliers. So, we might see placements after negotiations of prices. Pakistani suppliers are trying to restart the production that closed earlier and it is expected that improved business activity will support them in days to come.
Chinese customers kept on checking prices as a good number of inquiries were received. However, suppliers increased their prices but they are flexible to negotiate in the presence of firm bids.
European customers floated a good number of inquiries. Some orders in normal and specialized yarns were also matured at improved price levels.
|Count||USD / Bale|
|16/1 Carded Weaving||555 – 560|
|20/1 Carded Weaving||565 – 575|
|20/1 CM||615 – 625|
|16/1 CM||605 – 615|
|20/2 CD||645 – 655|
|24/2 CD||685 – 695|
|10/1 CARDED SIRO YARN WEAVING||485 – 500|
PAKISTAN FABRIC MARKET
The local fabric market remained slow throughout the week for both narrow and wider-width fabrics.
Local finishers remained silent for another week and did not share bulk inquiries due to which limited business materialization was reported for both narrow and wider-width fabrics. Buyers remained confused throughout the week and did not show interest in buying. Resultantly, the week closed with dull business materialization for both narrow and wider-width fabrics.
Weavers are showing great desperation to get orders and following each inquiry and asking for a reasonable bid to confirm orders to keep their looms running.
Currently, weavers are booked in narrow width till the mid-November~3rd week of November and have
coverage of their wider width looms till the 3rd week of November’22 ~ End November’22 and offering onward deliveries, whereas weavers booked their special looms till early December’22.
|Construction||Price US$/YD Ex Mill|
|16CDX12CD / 108X56 – 63″ 3/1 “S” TWILL PAK CTN||1.48 – 1.50|
|20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN||1.38 – 1.40|
|20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN||1.16 – 1.18|
EXPORT FABRIC MARKET
Improved trading activity was seen after mid of a week due to increased prices of NYCF and domestic cotton.
Most people have their opinion that the market has touched a lower bottom and it has to bounce back hence the price in the international market and domestically has started rising. It will adjust on the upper level which pushed some of the customers to place their orders who were holding to see market stability.
Some orders were booked from Japan, China, and Korean customers towards the end of the week.
Asking prices were stable till mid of the week however it gets firm towards the end of the week due to rise trend of NYCF and local cotton.
Suppliers are still selling the fabric at loss just to engage their looms however they are trying to increase their prices where it is possible to minimize their losses.
Currently, suppliers are booked for the next 2~3 weeks and offering onward delivery as lead time is still not an issue.
There was a good flow of inquiries from Europe and the USA resulting in decent bookings towards the end of the week in anticipation of a firm price trend in days to come.
Wider width fabric prices remained stable during the week despite of increase in price trend towards the end of the week. This is because of slow demand as a business is still not in big volume.
Wider width suppliers are booked for the next 3~4 weeks and offering onward deliveries.
Following are the closing rates based on CNF Far Eastern ports:
|Construction||Price US$/YD CNF Far East|
|16CDX12CD / 108X56 – 63″ 3/1 “S” TWILL PAK CTN||1.46 – 1.48|
|20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN||1.36 – 1.38|
|20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN||1.14 – 1.16|
BED LINEN & TOWELS
Home Textiles’ overall business activity is slow and new business are very limited in recent weeks. European customers are sharing inquiries but there is still a price difference against the targets shared by customers, it is expected that some business activity will be done in November. 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 the slower side around the globe which is affecting business volume in Pakistan and as well as other regions around the globe for Home Textile products.
The garment industry in general has shown normal activity in which the materialization of orders and
inquiries has been much lower, and it seems that this will also slowly affect the garment industry due to
fluctuations in prices such as cotton and other dyes materials. Most retailers and brands are reducing their demand around the globe and are not currently placing any significant orders in the market. This is happening due to the current recession and inflation.
It is known from various sources that many factories are operating below their capacity and are struggling to attract new orders to fill their factory capacity. They are currently booked till the end of Nov and offering onward deliveries.
Customers are anticipating new developments as several brands offer seasonal developments for AW23, half of which have shipped, with orders expected in late 2022 or early 2023.
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.
Textile markets have no demand around the globe, and worldwide inflation hitting the global economy. It seems that the market will remain dull for a few more months until the economies\inflations conflicts are settled. Inflation lemmatizes the whole world towards their basic necessities\needs.
The cotton and textile sector is severely affected due to the recession. Textile and spinning mills are cautious while ginners are eager to sell their stock. The business volume also remained relatively low. The needy mills are interested in booking cotton from foreign countries. Business remained slow and dull and will continue for both narrow and wider-width fabrics in the local market.
There was a good number of inquiries in the export yarn market as customers were active during the week. Orders materialization is still limited but customers are positive towards placing orders and we might see good business activity in days to come.
Local and Export fabric market activity picked up towards the end of the week as customers from the Far East, Asia, Europe, and the USA placed a decent quantity of orders. Suppliers have their opinion that raw material prices have touched the bottom and it is now expected to settle the market trend on the upper level than last week’s prices.