PAKISTAN COTTON MARKET
During the last week in local cotton, business activity remained dull and buyers were away from buying of cotton. Direction less market putting pressure on all ginners and spinners. Inquiries and deals were not observed due to dull finished product demand. Mill buyers maintained a cautious undertone.
Ginners are in a financial crunch due to stocks carryforward with them and only needy buyers are involved in cautious buying as per requirement. Textile mills are running at around 40~50% capacity. Due to the severe recession in cotton yarn and textile products stock is piling up in mills.
In the local cotton market, the prices showed further softness around 200~400 Rs per maund. The rate of cotton was Rs 14,800 to Rs 16,800 per maund. The price of Phutti is between Rs 5,500 and 9,000 per 40 kg. KCA was the same without any change at the level of Rs.16,500 per maund.
Cotton is by far the most undervalued commodity traded on any futures exchange. Inflation effectively destroyed 10-15% of the demand for cotton and sent prices spiraling down. Last week’s release of the December USDA supply demand report explained cotton’s price struggles over the past four to five months. The world cotton picture included lower production, lower consumption, lower exports, and a price depressing increase in world carryover to 90 million bales.
The U.S. picture was even more troublesome with higher production coupled with lower domestic consumption and lower exports. Together, these gave way to a further increase in domestic carryover stocks. Prior to this new USDA estimate, the possibility of lower carryover stocks had given rise to an improved price for old crop (2022) production. The fact that the estimate of 2022 ending stocks was increased suggests the March-May-July 2023 futures contracts will trend lower before possibly moving into the high 80s. The mid-to-high 70s is unfortunately on the horizon for old crops. The value should
return to new crops once the economy can begin to strengthen, at least six months and probably 12 months away. Inflation continues as a major problem, and inflation has historically hit the farm sector with both fists.
China’s agriculture ministry lowered its outlook for cotton consumption on Friday, as slowing global economic growth continues to hurt demand for textiles. China’s cotton consumption in the 2022/23 crop year that began in September is seen at 7.5 million tonnes, 200,000 tonnes lower than in last month’s forecast.
In India cotton yarn prices further declined as buyers in the textile value chain were cautious amid speculations of the
global recession. However, cotton yarn prices remained stable.
Buying of cotton yarn was limited as buyers further tightened their purchases amid uncertainty regarding the revival of
demand. Buyers remained absent from the market as they were unsure about demand from the garment industry. Exports were also unviable due to the disparity in prices. Indian yarn cannot be shipped to other countries as domestic cotton is 15
The rate of cotton in Sindh is between Rs 14,800 to Rs 16,500 per maund. The rate of Phutti as per quality is between Rs 6,000 to Rs 8,000 per 40 kg. In Punjab province, the price of cotton was Rs 15,000 to Rs 16,800 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 0.79~0.90 Lbs. (14,500~16,800/ maund).
|Opening Of the Week||Closing Of the Week||Change|
Crude Oil prices opened at USD 73.17 a higher level compared to last week’s closing figures.
In this week, crude oil prices rose in the next two sessions, later showing a downward trend till closing, hence closing on the upper side by the end of the week.
On the last day of the week, Crude Oil prices closed at USD 74.29 with an increase of USD 1.12 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, 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 1.06 and the British Pound closed on a negative
note with a figure of 1.21 against the USD.
|LC 120 Days||216.60||216.55|
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 showed mixed sentiment this week and closed on the upper side by the end of the week.
On the last day of the week, DEC 2022 closed at 81.92 with an increase of 253 points.
On the last day of the week, MAR 2023 closed at 82.08 with a rose of 260 points.
On the last day of the week, MAY 2023 closed at 82.03 with an upward of 262 points.
On the last day of the week, JUL 2023 closed at 80.68 with a surge of 241 points.
LIVER POOL INDICES
Liverpool Index A opened at 98.90 a lower level than the previous week’s closing figure.
In this week’s Index, “A” showed mix sentiment 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 99.20 with an increase of 30 points.
|Opening of the Week||Closing of the Week||Change|
PAKISTAN YARN MARKET
The local yarn market is unremitting similar in asking prices and dignified in business by the end of this week following NYCF and the local cotton market. Inquiries from customers are entertained in working with mills on bids & quantity. Spinning mills have primary stocks and severe cash complications. Sellers were overstated to sell the yarn. Whereas buyers are in a lenient situation & 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 remain indulgent in the international market plus the distressing of the US $ parity effect in Pak rupees on importing fiber. While crude oil prices deviated by the end of this week. For next week, PSF prices are expected to remain stable.
Faisalabad’s trading market has limited sales of PV and Viscose yarns. The cash flow crunch remains preoccupied. There is less order for attaining further yarn. Traders were strident with their stocks and loom owners were in an inflexible 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||2700 – 2750||480 – 490|
|20/1 Carded Weaving||2750 – 2850||490 – 510|
|30/1 Carded Weaving||2950 – 3100||525 – 555|
|30/1 PC Carded Weaving 52:48||2400 – 2520||430 – 450|
|40/1 Combed Compact Weaving||3580 – 3700||640 – 660|
|60/1 Combed Compact Weaving||4800 – 5000||855 – 890|
|80/1 Combed Compact Weaving||7700 – 8000||1375 – 1430|
|40/1 CVC Carded Weaving 60:40||2900 – 3080||520 – 550|
EXPORT YARN MARKET
The export yarn market showed better activity during the week. Customers floated good numbers of inquiries against which order materialization was also improved as customers took an interest to place orders.
Customers are now making decisions considering that the market has touched rock bottom levels. Hence there have been good placements as customers are now also trying to average out their previous high-price orders.
If we analyze the market overall, there has been decent demand in the market after prices are coming to the logical levels of customer demand.
At the same time, the fabric business has also picked up, generating demand in the domestic yarn market. Cotton prices are also stable and spinners have started buying cotton regularly now.
Chinese customers kept on checking prices as a good number of inquiries were received. This week, improved business activity has been noticed by Chinese customers.
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||535 – 540|
|20/1 Carded Weaving||545 – 550|
|20/1 CM||580 – 585|
|16/1 CM||570 – 575|
|20/2 CD||570 – 575|
|24/2 CD||590 – 595|
|10/1 CARDED SIRO YARN WEAVING||455 – 470|
PAKISTAN FABRIC MARKET
In the current week under review, the local fabric market once again showed dull activity for both narrow and wider-width fabrics.
Local buyers opted to remain sidelined and shared limited inquiries and resultantly slow sentiments prevailed observed for both narrow and wider-width fabrics.
Weavers are working hard to extend their current booking and showing desperation to confirm orders and follow every inquiry for any reasonable bid.
Currently, weavers are booked in narrow width till the end of December and covered their wider width looms till early January’23 and offering onward deliveries. Weavers have booked their special looms till mid-January’23 ~ 3rd week January’23.
|Construction||Price US$/YD Ex Mill|
|16CDX12CD / 108X56 – 63″ 3/1 “S” TWILL PAK CTN||1.41 – 1.43|
|20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN||1.31 – 1.33|
|20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN||1.09 – 1.11|
EXPORT FABRIC MARKET
Another week went slow for Far Eastern markets. Korean customers have exchanged a limited number of inquiries however no considerable business was witnessed.
Some of the Chinese customers have bought limited quantities from their selected suppliers. No inquiries were received from Bangladesh, Vietnam, and Japan.
Asking prices were stable as of last week due to stable raw material prices. Currently, good suppliers are booked till the end of Dec and offering early ~ mid-Jan onward deliveries. Most of the suppliers are in a position to start production immediately after order confirmation due to less buying and available production space.
A limited number of inquiries were received from European customers resulting in limited buying during the
week. The USA market remained quiet as no considerable buying was reported. Wider width suppliers are offering 30~40 days lead time.
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 was slow this week and also the new placements were very limited. We are forecasting that this trend will continue till early next year. 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 that supply Home Textile products. The manufacturers are busy in preparation for Heimtextil and there is a slight hope to have some confirmations during the Heimtextil fair.
The apparel industry in general has shown normal activity in which the arrival of orders and inquiries has been much lower and it seems that this will slowly affect the apparel industry as well due to fluctuations in raw material prices. such as cotton and other dye materials.
It is known from various sources that many factories are operating below capacity and are struggling to attract new orders to fill their factory capacity. They are currently reserved until the end of January 23rd and offered thereafter. Customers place orders, but only for important or urgent orders, the rest keep their orders until the situation is clarified. There is
a good chance that the order will come after the Christmas holidays.
Sustainability remained an important element as most customers, particularly large global brands, demanded eco-friendly products. Pakistani garment factories have all the necessary facilities and compliance requirements to meet the demands of the customers. In addition to sustainable products, customers have shown interest in garments made from specialty fibers and structured fabrics.
About the upcoming market, it is evaluated that demand from end customer leads to local yarn prices and remain under sale pressure due to narrow mandate & oversupply. Further price liking will be according to the market and source of dissimilar yarn counts, leading to the price level.
International cotton experts believe that between the current 2022-23 cotton season there will be a recession in cotton demand and prices and it is expected that the closing stock of cotton will continue to increase while cotton consumption will remain low due to which there is a little hope of an increase in cotton prices. Textile mills should do business very carefully.
For the coming weeks, we expect slow sentiments to continue for both narrow and wider-width fabrics. The export yarn market is picking up in terms of inquiries and order placements. Customers have accepted the fact that prices have already touched rock bottom levels and now placing orders for current demand as well as to average our previous high-price orders. Hence, we might see good business activity in days to come as well.
For Export fabric, comparatively less business activity was seen during the week. Prices remained stable due to stable raw material prices. The business activity may improve after Christmas / New Year holidays.
Garment demand is shrinking and it is difficult to meet factory capacity based on the current order intake. Suppliers are very aggressive to catch orders and discussing every single possibility to confirm, but not getting any support from customers for the new orders due to less demand.
Home Textiles business activity is on the slower side and demand can only be determined after Christmas/ New year break, it is expected that this trend will be continued till early next year.