Pakistan Cotton Market:
During the last week in local cotton, dullness prevailed in the absence of textile product orders, no improvement was seen hence slow business was observed. This week uncertainty prevailed due to the news of political disturbance and currency devolution. It seems that in the coming days, prices may increase of cotton due to the devaluation of PKR and suppliers may take benefits in export.
As the bells for another new year are tolling, the country’s crippled economy will be hobbling into 2023 with a humiliating record of the downward spiral of rupees vis-à-vis the US dollar. With the government struggling with high import payments, depleting foreign exchange reserves, and political uncertainty, the overall value of the Pakistani rupee depreciated by Rs48.38 against the greenback in 2022.
Local cotton prices remained firm to upward. Imported cotton will be very difficult as dollars hit badly. Import of cotton shipments is stuck at port due to the bank’s issues, which are not issuing dollars to the beneficiaries and also suffering the export orders as well. Still the market is uncertain and spinners \buyers are confused about how to deal with this situation.
U.S. production is forecasted at 14.68 million bales. Global production is projected at 115.40 million bales. World consumption is down to 110.9 million bales due to decreased use in India, Indonesia, and Vietnam. U.S. exports are forecasted at 12 million bales, down from 14.6 million bales in 2021/22. Global exports are forecasted at 41.7 million bales, down from 42.9 million bales in the previous marketing year. U.S. ending stocks are expected to be 4.2 million bales, representing 30% of projected use.
Dullness prevailed in activity so prices remained firm upward without any major changes. The rate of cotton was Rs 17,000 to Rs 21,000 per maund. The price of Phutti is in between Rs 7,500 and 10,000 per 40 kg. KCA remained the same at the level of at 20,000 per maund. PSF took the jump and increase 20 rupees within a week and came to 323 per/kgs.
The rate of cotton in Sindh is in between Rs 16,800 to Rs 20,500 per maund. The rate of Phutti as per quality is in between Rs 7,500 to Rs 9,500 per 40 kg. In Punjab province, the price of cotton was Rs 18,500 to Rs 21,000 per maund, and the price of Phutti was Rs 8,500 to Rs, 10,000 per 40 kg.
The price of Phutti was in the range of USC 0.80~1.00 Lbs. (16,900~22,000/ maund).
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 85.00 | 80.00 | -5.00 |
| Highest | 106.00 | 100.00 | -6.00 |
Crude Oil:
Crude Oil prices opened at USD 81.62 a higher level compared to last week’s closing figures.
In this week, crude oil showed mixed sentiment, hence closed on the negative side by the end of the week.
On the last day of the week, Crude Oil prices closed at USD 79.68 with a decrease of USD 1.94 cents as of the opening figure of the week.
| Opening of Week | Closing Of Week | Change | |
| Price | 81.62 | 79.68 | -1.94 |
Exchange Rate:
In last week value of Pak rupee drastically depreciated against US Dollar’s, 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 1.09 and the British Pound also closed on a negative note with a figure 1.24 against USD.
| Selling | Buying | |
| LC Sight | 253.67 | 253.62 |
| LC 120 Days | 241.98 | 241.93 |
| Open Market | 258.51 | 252.90 |
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 overall mix trend and showed during the week and closed on the lower side by the end of week.
On the last day of the week, DEC 2022 closed at 86.89 with a decrease of 50 points.
On the last day of the week, MAR 2023 closed at 87.45 with a drop of 34 points.
On the last day of the week, MAY 2023 closed at 87.80 with a downward of 26 points.
On the last day of the week, JUL 2023 closed at 85.71 with an increase of 8 points.
Liver Pool Indices:
Liverpool Index A opened at 99.10 a lower level than the previous week’s closing figure.
In this week Index “A” showed an upward trend in the next two sessions and later dropped, hence recovered again on closing and showed a positive side closing by end of the week.
At the last day of the week, LPI “A” closed at 101.65 with an increase of 255 points.
| Opening of the Week | Closing of the Week | Change | |
| Index A | 99.10 | 101.65 | 2.55 |
Pakistan Yarn Market:
The Local yarn market stood constant and firm in prices by the start of the week following NYCF but by mid of the week, prices jumped uphill due to the US dollar hike and its parity effect in Pak rupees. The middling activity was seen as a business. Prices were held by spinners and all old offers were extracted. Buyers were in a perceiving state & the raw cotton prices in the Global market are followed by NYCF
PSF prices were increased three times within a week first Rs.10/kg on 23rd Jan second Rs.5/kg on 26th Jan and third-time Rs.15/kg on 27th Jan by IFL in the domestic market. PTA and MEG prices remain lenient in the international market plus the rising of the US $ parity effect in Pak rupees on importing fiber. While crude oil prices amplified by the end of this week. For next week, PSF prices are expected to further increase by 10 Rs/kg.
Faisalabad’s trading market has limited sales of PV and Viscose yarns. No demand in PC/CVC has been seen and financial crunch and cash liquidity issues remain. Traders were significant with their stocks and loom owners were in an unbending 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 | 3200 – 3350 | 505 – 530 |
| 20/1 Carded Weaving | 3200 – 3450 | 505 – 545 |
| 30/1 Carded Weaving | 3600 – 3700 | 570 – 585 |
| 30/1 PC Carded Weaving 52:48 | 2750 – 2950 | 435 – 465 |
| 40/1 Combed Compact Weaving | 4150 – 4300 | 655 – 680 |
| 60/1 Combed Compact Weaving | 5500 – 5800 | 865 – 915 |
| 80/1 Combed Compact Weaving | 8300 – 8500 | 1310 – 1340 |
| 40/1 CVC Carded Weaving 60:40 | 3400 – 3500 | 535 – 550 |
Export Yarn Market:
The export yarn market remained under slow business activity. Cotton prices showed an upward trend in Pakistan due to the devaluation of PKR against the USD. This has had a significant impact on yarn prices in the domestic market and all suppliers increased their prices.
At the same time, the challenges of cotton shortage are becoming serious as spinners are not getting shipments of Imported cotton due to which they are forced to book very expensive cotton from the local market.
On the other side, customers also showed a slight improvement in their prices and booked orders at increased levels. If we overall analyze the market conditions, we can say that prices are getting better after touching rock bottom levels of prices.
We might see good business activity in days to come as things are becoming tough for spinners and they are forced to increase their prices. If the customer will not increase their bids, suppliers will close their production despite running at losses as losses are huge.
Chinese customers remained slow and slow as they were on holiday. However, Chinese customers seem to have a good pace and kept checking prices. We might see good confirmation from Chinese market in the next week as demand is arising regularly after Government’s decision to finish lockdowns.
European customers were also active and floated decent numbers of inquiries. However, order confirmations remained slow as they are slowly gradually accepting the increase in prices. So, we might see orders to be confirmed in the month of January.
| Count | USD / Bale |
| 16/1 Carded Weaving | 590 – 595 |
| 20/1 Carded Weaving | 600 – 605 |
| 20/1 CM | 620 – 625 |
| 16/1 CM | 610 – 615 |
| 20/2 CD | 620 – 625 |
| 24/2 CD | 650 – 665 |
| 10/1 CARDED SIRO YARN WEAVING | 470 – 510 |
Pakistan Fabric Market:
In the current week under review, the local fabric market witnessed a bloodbath because, after mid-week, fabric prices increased by 12-15% for both narrow and wider-width fabrics owing to the sudden devaluation of the PAK Rupee. After all, Pakistan has no choice but to resume the IMF agreement which changed market fundamentals, and weavers not only withdrew their offered prices but also stopped offering after mid of a week.
Weavers received limited inquiries throughout the week but business materialization remained negligible due to rising fabric prices. Therefore, the week closed with dull activity for both narrow and wider-width fabrics.
Currently, weavers are booked in narrow width till mid-February’23 whereas wider width looms have coverage till the 3rd Week-February and offer onward deliveries. Weavers have booked their special looms till the end of Feb’23.
| Construction | Price US$/YD Ex Mill |
| 16CDX12CD / 108X56 – 63″ 3/1 “S” TWILL PAK CTN | 1.46 – 1.48 |
| 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:
Some of the Far Eastern customers kept on checking fabric prices but no considerable business was witnessed.
Due to too much hike of USD against PKR, suppliers held offering prices towards the end of the week. The market situation may get clear from next week so suppliers will start offering prices once the situation is clear.
Although yarn prices increased by about 10~15% fabric prices remained the same as the USD hike compensated for the price.
Suppliers are booked for the next two weeks and offering onward deliveries.
European customers sent a good number of inquiries resulting in limited buying both in narrow and wider-width fabric.
The USA market still remained very slow due to less demand.
Wider width suppliers are offering 30~40 days’ lead time; some of them can start looms in two weeks without many orders.
Wider width suppliers are booked till the end of Feb and offering mid-March 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 | 1.30 – 1.32 |
| 20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN | 1.08 – 1.10 |
Bed Linen & Towels:
The year 2022 was an uncertain year for global textiles. Global recession, energy shortages, high costs, and declining orders of low-cost home textiles took their toll on Pakistani textiles. The year 2023 would however be more challenging than 2022. The weak rupee and foreign exchange woes are other worries
in 2023.
In-Home Textiles overall this week there was seen business activity and new placements were made in the market. The international buyers give the confirmation of the orders that were in negotiation before and during Heimtexil.
Garments:
Continuing the same recessionary phase Pakistan’s garment industry is facing a tough time as their production capacities are not fully covered due to lack of orders from foreign customers.
Overall global inflation has kept the buyers away from placing bulk orders. They find it difficult to forecast the future demand, hence reluctant to place big volumes. At the same time factories in Pakistan are also finding it difficult to meet their fixed costs as units are not fully operational. Some garment manufacturers were pushed to send their staff on leave without pay till the time factories get new orders and they will call them back at duty. With all these squeezed demand phase there are few customers who have placed orders for FW23 season. At the same time new developments for SS24 are also in discussion. Factories have space to offer deliveries from April 2023 onward for the new inquiries coming in.
Going Forward:
It is estimated that yarn prices and further business activity were cleared by the upcoming week. Further price fondness will be according to the market and source of distinct yarn counts, leading to the price level.
Pakistan cotton remained firm to upward, dolor appreciated vs devaluation of PKR spread the uncertainty in the local market. Ginners would be firm despite the sluggish demand for textile goods. Import of cotton is going to be difficult due to devaluation and import disturbance at port due to the shortage of dolor. Coming days may be more critical for all sectors of the industry fail to get export orders
For the coming days, we expect local fabric to remain sideways with limited trading activity for both narrow and wider width fabrics.
Export yarn suppliers kept on increasing prices with good business in hand. Customers remained active and kept on discussing reasonable numbers of firm demands which are expected to close in next week. This will put significant impact on prices as import of cotton is full of turbulence due to restriction of the Government.
With all the recessionary phase, garment factories are not fully operational due to lack of orders from customers. At the same time few customers have placed orders for FW23 season. New developments for SS24 are also in discussion.
For Home textile In 2023, consumers will be unpredictable and fickle. Brands must consider the factors that affect shopping behaviors and respond accordingly. Pakistan suppliers would have to keep a close eye on the changing strategies of their buyers. The issues afflicting the textile sector of Pakistan in 2023 are almost the carryover of the problems it faced in 2022.
