PAKISTAN COTTON MARKET
During the last week in local cotton, prices showed firmness and an upward trend following the trend of international cotton, but buyers remained away from buying and dullness prevailed due to the closure of mills /finical crunch in the local market. Business activity internationally not improving due to the recession and hitting badly the textile business. Ginners are in a financial crunch due to stocks carry forward with them and only needy buyers are involved in cautious buying as per requirement.
Pakistan expects around 5 million bales in the current season and has to import 7~8 million more bales to cover the deficit, however around 5.2 million bales orders are already confirmed. Less business activity may drop consumption further in the day to come.
In the local cotton market, the prices remained firm to upward, and around 300 ~400 rs per maund increase was seen. The rate of cotton was Rs 15,500 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.16,500 per maund.
In China, cotton yarn sales have significantly improved since December due to the optimization of domestic epidemic prevention and control measures and the government’s measures to revitalize the economy. Meanwhile, the number of COVID-19 patients has increased, the absence of workers in cotton-spinning enterprises has increased, and the vacancy rate has reached one-third. In the first three weeks, cotton yarn sales volume has exceeded 500 tons, 120% of the total sales volume in November. The accumulated inventory has declined rapidly and the operating pressure of the enterprise has eased significantly. At present, cotton spinning enterprises are generally destocking, the price rises slightly in an overall stable situation, and strive to reduce the cotton yarn inventory to a normal level before the Spring Festival.
As expected, the Fed raised interest rates for the fourth time this year. Smaller than those previous, it was their comments afterward that shook both equity and commodity markets. Even though consumer prices fell in November to an annualized rate of 7.1% down sharply from June’s 9.1%, the red-hot labor market has the Fed believing high inflation will continue through 2023 thereby suggesting additional rate hikes will be forthcoming. The increased risk of a severe recession is beginning to alter consumer behavior.
A glimpse of this was seen in November’s retail sales numbers which show purchases by consumers fell 0.6%, the biggest
decline in a year. After months wherein they exhausted government stimulus money, built credit card debt to record pre-pandemic levels, and robbed from savings, consumer buying is becoming more strategic. It’s getting more and more difficult to remain optimistic about cotton prices.
In Indian market, the cotton yarn market also witnessed a slightly better demand. Demand, specifically from the domestic market, improved, but the prices of cotton yarn continued to remain under pressure.
The rate of cotton in Sindh is in between Rs 15,800 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 16,000 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 0.86~0.95 Lbs. (15,800~17,500/ maund).
|Opening Of the Week||Closing Of the Week||Change|
Crude Oil prices opened at USD 75.19 a higher level than last week’s closing figures.
This week, crude oil prices showed an upward trend and closed on the upper side by the end of the week.
On the last day of the week, Crude Oil prices closed at USD 79.56 with an increase of USD 4.37 cents as of the opening figure of the week.
|Opening of Week||Closing Of Week||Change|
In the last week values of Pak rupee depreciated against US Dollar, other major currencies showed mix trend in both
interbank and open markets.
At the end of week, Euro closed on a positive note with the figure of 1.07 and British Pound closed on a negative note
with a figure 1.21 against USD.
|LC 120 Days||215.64||215.59|
NEW YORK COTTON FUTURE
New York Cotton futures opened at a higher level on Monday as compared to the previous week’s closing figures.
NYCF showed an upward trend in the next two sessions, later dropping but again rose on the last session and closed
on the positive side by the end of the week.
On the last day of the week, DEC 2022 closed at 85.21 with an increase of 113 points.
On the last day of the week, MAR 2023 closed at 85.18 with a rose of 122 points.
On the last day of the week, MAY 2023 closed at 84.91 with an upward of 116 points.
On the last day of the week, JUL 2023 closed at 82.96 with a surge up of 80 points.
LIVER POOL INDICES
Liverpool Index A opened at 98.50 a lower level of the previous week’s closing figure.
Index “A” showed an upward trend this week and closed on the positive side by the end of the week.
At the last day of the week, LPI “A” closed at 105.55 with an increase of 705 points.
|Opening of the Week||Closing of the Week||Change|
PAKISTAN YARN MARKET
The local yarn market direct a minor increase in asking prices and upright in business by the end of this week following NYCF and the local cotton market. Good Inquiries from customers are shared in working with mills on proposals. Spinning mills have major stock and cash liquidity concerns. Sellers were interested to sell the yarn. Whereas buyers are in observing 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 permissive in the international market plus the decreasing 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 accelerate slightly increase.
Faisalabad’s trading market has the foremost sales of PV and Viscose yarns with an increase in prices. The cash flow crunch remains engrossing. Other coarse counts remain in pressure with no demand & there is less order for getting further yarn. Traders were persuasive 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||2740 – 2780||490 – 495|
|20/1 Carded Weaving||2780 – 2890||495 – 515|
|30/1 Carded Weaving||2990 – 3150||535 – 560|
|30/1 PC Carded Weaving 52:48||2440 – 2530||435 – 450|
|40/1 Combed Compact Weaving||3600 – 3740||640 – 665|
|60/1 Combed Compact Weaving||4850 – 5100||865 – 910|
|80/1 Combed Compact Weaving||7750 – 8100||1380 – 1445|
|40/1 CVC Carded Weaving 60:40||2940 – 3120||525 – 555|
EXPORT YARN MARKET
Export yarn market showed good activity during the last week and customers inquired about yarns ,some of them are materialized. In china covid restrictions were soft down that was the major cause behind the good business activity.
It seems that buyers will take 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 from 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||460 – 485|
PAKISTAN FABRIC MARKET
The local fabric market remained slow and limited activity observed for both narrow and wider-width fabrics.
Buyers did not share bulk inquiries and booked only urgent orders against limited inquiries. Some of the finishing units are targeting very low prices which are difficult to match resultantly slow sentiments but improved activity reported for both narrow and wider width fabrics.
Weavers are pushing agents and following buyers for any reasonable bid to extend their current booking. Weavers are still desperate to confirm orders and following each and every inquiry for any reasonable bid.
Currently, weavers are booked in narrow width till early Janurary’23 and have covered their wider width looms till Mid ~ end January’23 and offering onward deliveries. Weavers have booked their special looms till mid of Feb.
|Construction||Price US$/YD Ex Mill|
|16CDX12CD / 108X56 – 63″ 3/1 “S” TWILL PAK CTN||1.36 – 1.38|
|20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN||1.24 – 1.26|
|20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN||1.02 – 1.04|
EXPORT FABRIC MARKET
Export fabric market remained dull and slow. Far Eastern customers are not getting enough demand from their end customers hence they are not into buying for bulk orders however placing only urgent orders.
Asking prices are soft even the raw material prices are firm just to sell the fabric as much as possible. Currently suppliers are offering mid Jan ~ end Jan onward deliveries as the production space is available.
European customers are partially operating their office as most of them have taken break for coming Christmas and New Year holidays.
Some of the customers have placed orders by early of week before going on their holidays. Wider width suppliers are offering early ~ mid Feb onward deliveries. Prices for wider width remained stable due to stable yarn prices in fine counts.
|Construction||Price US$/YD CNF Far East|
|16CDX12CD / 108X56 – 63″ 3/1 “S” TWILL PAK CTN||1.36 – 1.38|
|20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN||1.24 – 1.26|
|20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN||1.00 – 1.02|
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 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.
Overall, Pakistan’s garment industry is facing an uneven moment due to fewer available orders. Many factories are in a difficult situation and are not working at 100 percent. Due to inflation and recession, many small units could not support themselves and collapsed. Global demand is generally declining and the US and EU markets in particular have reduced their demand.
Even some customers have their clothing inventory and cannot use it properly due to the lower demand. Therefore, buyers are very cautious in future wholesale purchases. Some orders were placed by buyers in very small quantities. However, mass placement of FW23 is expected by the end of this quarter or early 2023. On the other hand, customers have started placing SS24 developments, first works are starting, which is a healthy sign.
There is a market for smaller requests, but for those requests, factories are offering shipments from January. Fluctuations in commodity prices are constant but affect apparel prices.
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.
For the local cotton, worldwide recession hitting textile business badly, ginners are facing severe financial crunch. It seems that business will remain slow for next couple of weeks.
For coming week, we expect rang bound activity for both narrow and wider width fabrics in domestic market. Export fabric market remained slow during the week. The prices were further softened about 2~3% even the raw material prices are firm. Export fabric activity may pick up after mid of Jan.
Pakistan’s garment industry is going through a difficult period, however, the industry expects orders in the first quarter of 2023, which could help Pakistan’s industry. 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.