PAKISTAN COTTON MARKET
During the last week in the local cotton market, activity dropped further, and buyers were remaining away from buying due to no demand of textile products. Despite of International upward trend in cotton price didn’t put impact, hence dullness prevailed. The textile sector is in crisis. The textile sector is in a financial crunch and is on the brink of closure.
Ginners have a stock with them and facing a severe financial crunch due to no business activity in the market. They have had old stock with higher prices with them.
In the local cotton market, the price showed softness in this week. The rate of cotton was Rs 15,000 to Rs 17,500 per maund. The price of Phutti is in between Rs 5,500 and 9,000 per 40 kg. KCA was the same without any change at the level of Rs.16,700 per maund.
China’s declining exports to the European Union (EU) in October and the third straight month of lower exports to the US cast a shadow over China’s export outlook, according to a recent report. The US and the EU are China’s largest export destinations, accounting for 16.5 percent and 15.8 percent of its overall export value in the first 10 months of 2022 (10M22), and coincident recessions are predicted in both the US and eurozone next year.
China’s exports of apparel and footwear dropped by 17 percent and grew by a slower 3 percent, respectively, from a high base. China’s exports to the EU dropped by 9.0 percent year-on-year (YoY) in October. China’s exports fell by 0.3 percent YoY in October 2022, the first YoY decline since May 2020, due to weakening demand from key trading partners, pandemic-induced production and logistics disruptions, and diminishing effects from price inflation added the report.
Exports to the US fell for the third straight month in October by 12.6 percent. India’s cotton yarn prices remained steady amid weak demand. The entire value chain is waiting for cotton prices to ease to start buying it, but farmers are unwilling to sell as they consider current prices to be unattractive after witnessing higher rates a few months ago. Traders feel that a steady trend may continue by the end of this year.
According to the export report of the United States Department of Agriculture, from November 11 to 17, 2022, the net contracted amount of US upland cotton in 2022/23 was -26,400 tons, the buyers from China, Pakistan, El Salvador, Peru and other countries canceled the earlier contract, among which the Chinese buyers not only did not continue to contract the 2022/23 US cotton, but on the contrary, it canceled 24,800 tons of contracts, accounting for 94% of the total
cancellations of US cotton contracts that week. At the same time, buyers from India, Turkey, Indonesia and other countries have significantly decreased the signing of US cotton this year.
PSF and recycled polyester prices have been falling due to international dynamics. Higher cotton prices are creating an uneasy scenario for the entire value chain, but a continued decrease in the prices of polyester is providing relief to the industry. There are indications that the domestic textile industry is focusing on polyester as raw material to cut production, especially for winter garments.
The rate of cotton in Sindh is in between Rs 15,000 to Rs 16,500 per maund. The rate of Phutti as per quality is in between Rs 6,000 to Rs 8,000 per 40 kg. In Punjab province, the price of cotton was Rs 15,500 to Rs 17,500 per maund, and the price of Phutti was Rs 7,000 to Rs,9,000 per 40 kg.
The price of Phutti was in the range of USC 0.82~0.96 Lbs. (15,000~17,500/ maund).
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 82.00 | 82.00 | 0.00 |
| Highest | 96.00 | 93.00 | -3.00 |
CRUDE OIL
Crude Oil prices opened at USD 77.24 a higher level compared to last week’s closing figures. This week, crude oil prices showed an upward trend, although dropped in the last session but overall closed on the positive side by the end.
On the last day of the week, Crude Oil prices closed at USD 79.98 with an increase of USD 2.74 cents as of the opening figure of the week.
| Opening of Week | Closing Of Week | Change | |
| Price | 77.24 | 79.98 | 2.74 |
EXCHANGE RATE
In the last week values of the Pak, rupee depreciated 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 1.05 and the British Pound also closed on a positive note with a figure of 1.23 against the USD.
| Selling | Buying | |
| LC Sight | 222.58 | 222.53 |
| LC 120 Days | 213.45 | 213.40 |
| Open Market | 226.44 | 221.46 |
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 dropped on the first-day session and later showed an upward march, hence again dropping on closing but accumulatively closed on the upper side by the end of the week.
On the last day of the week, DEC 2022 closed at 83.20 with an increase of 425 points.
On the last day of the week, MAR 2023 closed at 82.56 with a rose of 417 points.
On the last day of the week, MAY 2023 closed at 81.99 with upward of 428 points.
On the last day of the week, JUL 2023 closed at 81.71 with a surge of 535 points.
LIVER POOL INDICES
Liverpool Index A opened at 101.35 at the same level as the previous week’s closing figure.
In this week’s Index, “A” showed a downward trend this week, while rising in the last session and closing on the positive side by the end of the week.
On the last day of the week, LPI “A” closed at 102.90 with an increase of 155 points.
| Opening of the Week | Closing of the Week | Change | |
| Index A | 101.35 | 102.90 | 1.55 |
PAKISTAN YARN MARKET
The local yarn market continued stable in asking prices and unhurried in business by the end of this week following NYCF and the local cotton market. Limited inquiries were received during the week. Spinning mills have foremost stocks and had cash flow problems. Sellers were embellished to sell the yarn whereas buyers are in an indulgent position & NYCF follows the raw cotton prices in the Global market.
PSF prices continued stable in the domestic market during the last week ended. PTA and MEG prices remain lenient in the international market plus the upsetting of the US $ parity effect in Pak rupees on importing fiber.
While crude oil prices elevated by the end of this week. For next week, PSF prices are expected to remain stable. Faisalabad trading market remain quiet and limited business was seen. The yarn was not abundant in demand and had partial sales of PV and Viscose yarns. The cash flow system remains considerate. At the same time, Traders were embraced 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 | 2750 – 2825 | 495 – 510 |
| 20/1 Carded Weaving | 2700 – 2875 | 485 – 515 |
| 30/1 Carded Weaving | 2975 – 3150 | 535 – 565 |
| 30/1 PC Carded Weaving 52:48 | 2400 – 2600 | 430 – 465 |
| 40/1 Combed Compact Weaving | 3600 – 3750 | 645 – 675 |
| 60/1 Combed Compact Weaving | 4700 – 5100 | 845 – 915 |
| 80/1 Combed Compact Weaving | 8150 – 8500 | 1465 – 1530 |
| 40/1 CVC Carded Weaving 60:40 | 2950 – 3100 | 530 – 555 |
EXPORT YARN MARKET
The export yarn market showed improved business activity. Customers floated improved numbers of inquiries against which order materialization was also better as compared with the last couple of weeks.
Customers are now taking decisions and placing orders after tough negotiations with suppliers. If we analyze overall market conditions, demand has shown improvement as there has been good buying witnessed on black Friday. This has given customers an opportunity to place some orders in order to be ready for the end customer orders.
Many suppliers who planned to close their production due to tough market sentiments are returning to start their production. This is also a positive sign for the industry as people are taking a sigh of relief.
Chinese customers kept on checking prices as a good number of inquiries were received. This week, improved business activity has been noticed by Chinese suppliers.
European customers floated a good number of inquiries. Some orders in routine and specialized yarns were also matured at improved price levels.
| Count | USD / Bale |
| 16/1 Carded Weaving | 520 – 525 |
| 20/1 Carded Weaving | 530 – 535 |
| 20/1 CM | 595 – 600 |
| 16/1 CM | 590 – 595 |
| 20/2 CD | 605 – 610 |
| 24/2 CD | 630 – 635 |
| 10/1 CARDED SIRO YARN WEAVING | 470 – 490 |
PAKISTAN FABRIC MARKET
In current week under review the local fabric market remained sideways and closed with slow activity for another week for both narrow and wider-width fabrics.
Local finishers shared limited inquiries and resultantly limited buying observed both in narrow and wider width fabrics.
Weavers remained under pressure and desperate to capture the floating orders and following agents and buyers for any reasonable bid in order to extend their current booking.
Currently, weavers are booked in narrow width till 3rd week December and covered their wider width looms till end December’22 /early January’23 and offering onward deliveries. Weavers have booked their special looms till the early January’23 ~ Mid-January’23.
| Construction | Price US$/YD Ex Mill |
| 16CDX12CD / 108X56 – 63″ 3/1 “S” TWILL PAK CTN | 1.40 – 1.42 |
| 20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN | 1.30 – 1.32 |
| 20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN | 1.08 – 1.10 |
EXPORT FABRIC MARKET
Dullness business activity was observed from Far Eastern customers as there was no such demand was arises during the week under review.
Asking prices were remained soft due to much pressure on yarn prices which put softness in fabric prices.
Good suppliers have sales coverage till end of Dec and offering mid Jan onward deliveries. Average suppliers are offering 30 days lead time as looms are available for immediate start up.
Healthy business activity was seen from European markets as customers have started placing orders both in narrow and wider width fabric. There was good number of inquiries of work wear articles which are expected to finalize in week.
There were few inquiries from USA market which are still under negotiation process. These mainly basic items as well as flannel fabric.
Wider width suppliers are offering mid Jan ~ end Jan onward deliveries as they have covered some sales both from European and USA buyers.
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 | 1.38 – 1.40 |
| 20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN | 1.28 – 1.30 |
| 20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN | 1.06 – 1.08 |
BED LINEN & TOWELS
Home Textiles overall business activity is slow 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 December.
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.
GARMENTS
Pakistan’s garment industry is going through a difficult period, with many factories having reduced production capacity and a lack of orders. Usually, factories have future projections but unfortunately, things have changed in the current scenario and they don’t have many projections to fill the factory capacity.
In general, it has been observed that many major retailers and brands have not been involved in building large allocations as in previous seasons, according to various sources the only reason for this is global inflation and lack of demand. At the same time, the prices for raw materials, dyes, and cotton fluctuate.
On the other hand, the factories have already received bulk orders for SS23 from different brands and are busy fulfilling them, and in the future, they have received SS24 Development for the coming season, which bodes well for Pakistan’s textile industry. Factories are reserved until End-January and offer delivery after that.
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 evaluated that cotton prices will lead to local yarn prices and remain under sale pressure due to limited demand & oversupply. Further price liking will be according to the market and source of dissimilar yarn counts, leading to the price level.
For the local cotton, Low demand has put significant pressure on the suppliers/mills. They are closing their units and seems that the market will remain dull for a few more months until the economies/inflation conflicts are settled. It seems that cotton prices will not rise further and may remain the same on these levels in the coming days. So overall trading /demand remained the same. he Chinese economy, and demand for raw cotton, was expected to decline due to the impact of the COVID-19 virus.
For coming weeks, we expect the local fabric market to remain range bound with limited trading activity for both narrow and wider width. Improved business activity was observed in export fabric market as some European and USA buyers have started placing orders both in narrow and wider width fabric. There was good flow of inquiries in work wear items which are expected to finalize during next week. Asking prices remained soft with 2~3% negotiation margin.
Overall betterment in activity was witnessed in Export yarn markets. Customers remained in the market and floated handsome numbers of inquiries. Order materialization has been improved as well. Suppliers are now becoming firm after selling good quantities.
The garment industry is facing the same crisis as other textile sectors, demand is shrinking and it is difficult to meet factory capacity based on current order intake.
As stocks in Home textile are build up with Retailers so business activity is on slower side and demand can only be determined after Christmas / New year break, it is expected that this trend will be continued till Quarter 1 of 2023.
