Pakistan Cotton Market:
During the last week in local cotton, activity was improved in fear that import of cotton wouldn’t be feasible as currency devaluation hit the overall economy very badly. Demand rose in the local cotton market just because of that cotton may increase further due to the currency. Hence, the market is still directionless buyers and sellers are confused and uncertainty prevails.
Import of cotton shipments are 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.
Local cotton prices remained firm to upward due to the increase in demand for cotton. The rate of cotton was Rs 19,000 to Rs 23,000 per maund. The price of Phutti is between Rs 7,500 and 10,500 per 40 kg. KCA remained the same at the level of 20,000 per maund. PSF rose 7 PKr this week and came at the level of 330 pkr/kgs.
The cotton season is coming to an end in the country. The stock of cotton is decreasing day by day. On the other hand, due to the shortage of US dollars there is a delay in the delivery of imported cotton; as a result, the stock of cotton is getting less and less. There is hope amongst the textile millers that the demand for textile products and cotton yarn may increase in the coming days.
Although the recession in the international markets continues due to the conflict between Russia and Ukraine, it is expected that some movement will be started in the purchase of textile products in the European and American markets.
There was overall stability in the international cotton markets as the rate of Future Trading of New York cotton for the month of March was between 84 and 86 US cents per pound.
Cotton prices rose significantly in China in January, over positive anticipations about the return to normal in the post-Covid period. The average level of the market indicator gained 2.3% from the previous month. In India by contrast, the cotton indicator Fell 3.2% over a low level in demand from spinners.
Cotton arrival in Pakistan decreased by 36% year-on-year, showed the latest data released by the Pakistan Cotton Ginner’s Association (PCGA) on Friday. As per the report, total cotton arrival in Pakistan declined to 4.764 million bales as of February 1, 2023, compared to 7.421 million bales in the same period last year, a fall of 2.657 million bales.
Cotton arrival in Sindh was 1.871 million bales compared to 3.512 million bales in the same period in 2021, a decrease of 1.641 million bales or 47%. On a monthly basis, cotton arrival recorded a slight improvement of 1% as compared to 1.850 million bales arrived on January 1.
Similarly, cotton arrival in Punjab clocked in at 2.893 million bales as compared to 3.909 million bales reported in the same period last year, a decline of 26%. However, month-on-month, basis, cotton arrival recorded an increase of 5% as compared to 2.762 million bales on January 1.
The rate of cotton in Sindh is between Rs 19,000 to Rs 23,000 per maund. The rate of Phutti as per quality is between Rs 8,500 to Rs 10,500 per 40 kg. In Punjab province, the price of cotton was Rs 19,500 to Rs 23,000 per maund, and the price of Phutti was Rs 8,500 to Rs, 10,500 per 40 kg.
The price of Phutti was in the range of USC 0.85~1.03 Lbs. (19,000~23,000/ maund).
| Opening Of the Week | Closing Of the Week | Change | |
| Lowest | 86.00 | 86.00 | 0.00 |
| Highest | 100.00 | 100.00 | 0.00 |
Crude Oil:
Crude Oil prices opened at USD 79.68 the same level as compared to last week’s closing figures.
In this week, crude oil showed downward sentiment and closed on the lower side by the end of the week.
On the last day of the week, Crude Oil prices closed at USD 73.39 with a decrease of USD 6.29 cents as of the opening figure of the week.
| Opening of Week | Closing Of Week | Change | |
| Price | 79.68 | 73.39 | -6.29 |
Exchange Rate:
Last week value of Pak rupee continually dropped 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 1.08 and the British Pound also closed on a negative note with a figure 1.20 against USD.
| Selling | Buying | |
| LC Sight | 269.76 | 269.71 |
| LC 120 Days | 258.45 | 258.40 |
| Open Market | 274.57 | 268.64 |
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 an overall mix trend during the week and closed on the upper side by the end of the week.
On the last day of the week, DEC 2022 closed at 85.43 with an increase of 33 points.
On the last day of the week, MAR 2023 closed at 86.11 with the rose of 37 points.
On the last day of the week, MAY 2023 closed at 86.72 with an upward of 53 points.
On the last day of the week, JUL 2023 closed at 85.26 with a surge of 110 points.
Liver Pool Indices:
Liverpool Index A opened at 102.40 a higher level than the previous week’s closing figure.
In this week Index “A” showed a downward trend in this week and closed on the lower side by end of the week.
On the last day of the week, LPI “A” closed at 100.95 with a decrease of 145 points.
| Opening of the Week | Closing of the Week | Change | |
| Index A | 102.40 | 100.95 | -1.45 |
Pakistan Yarn Market:
The Local yarn market jumped up and upsurge in prices by the start of the week following NYCF, prices soared by 15% approximately due to the US dollar climb and its parity effect in Pak rupees. Limited activity was seen as a business. Only urgent and required yarn were booked. Buyers were in an observing state & the raw cotton prices in the Global market are followed by NYCF.
PSF prices were increased by Rs.7/kg on 30th Jan-23 by IFL in the domestic market. PTA and MEG prices remain compassionate in the international market plus the increase of the US $ parity effect in Pak rupees on importing fiber. While crude oil prices down by the end of this week. For next week, PSF prices are expected to further increase by 5~7 Rs/kg.
Faisalabad’s trading market has no sales of PV and Viscose yarns as rates augmented. No demand in PC/CVC has been seen and financial head and cash fluidity issues remain. Traders were substantial 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 | 3550 – 3675 | 525 – 545 |
| 20/1 Carded Weaving | 3650 – 3800 | 540 – 565 |
| 30/1 Carded Weaving | 4000 – 4100 | 595 – 610 |
| 30/1 PC Carded Weaving 52:48 | 3050 – 3180 | 450 – 470 |
| 40/1 Combed Compact Weaving | 4500 – 4650 | 665 – 690 |
| 60/1 Combed Compact Weaving | 6000 – 6200 | 890 – 920 |
| 80/1 Combed Compact Weaving | 8400 – 8500 | 1245 – 1260 |
| 40/1 CVC Carded Weaving 60:40 | 3700 – 3800 | 550 – 565 |
Export Yarn Market:
Export yarn business market activity was good during the week.
Cotton prices showed an upward trend in Pakistan due to the devaluation of PKR against USD and good demand from local spinners. At the moment, prices of imported cotton are on the rise and it is expected that suppliers will prefer to buy cotton from the domestic market due to severe fluctuation in USD.
This has put a significant impact on yarn prices in the domestic market and all suppliers increased their prices in parity of strong USD against PKR. At the same time, the challenges of cotton shortage is becoming serious as spinners are not getting shipments of Imported cotton due to which they are forced to book very expensive cotton form the local market. Even cotton shipments that are coming in the import are of exceptionally high prices which are causing heavy losses to spinners.
On the other side, customers also showed a slight improvement in their prices and book orders with increased levels. If we analyze the market conditions, we can say that prices are getting better daily.
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 productions instead of running at losses which are huge.
Chinese customers remained active after coming from holidays and floated handsome numbers of inquiries. Business materialization was also good as customers confirmed orders with all suppliers at improved prices. This has made suppliers firm and comfortable.
European customers were also active and floated a decent number of inquiries. However, order confirmations remained limited as they are slowly and gradually accepting the increase in prices. So, we might see orders to be confirmed in the month of February.
| Count | USD / Bale |
| 16/1 Carded Weaving | 570 – 580 |
| 20/1 Carded Weaving | 580 – 590 |
| 20/1 CM | 615 – 620 |
| 16/1 CM | 610 – 615 |
| 20/2 CD | 600 – 605 |
| 24/2 CD | 625 – 630 |
| 10/1 CARDED SIRO YARN WEAVING | 490 – 500 |
Pakistan Fabric Market:
The local fabric market remained standstill throughout the week due to the uncertain dollar exchange rate which kept the suppliers confused throughout the week due to which they stopped their offers till mid of week, but after midweek they started offers with cautious approach and with a validity of some hours, due to which dull trading was reported for both narrow and wider width fabrics.
Buyers floated limited inquiries which were for price checking only, due to unrealistic high prices from weavers, buyers were unable to materialize their urgent requirements. Furthermore, it’s observed that finishers tried to place their maximum orders to their own weaving units.
Currently, weavers are booked in narrow width till mid-February ~ 3rd week February’23 and have booked their wider width looms till end of February and offer onward deliveries. Weavers have booked their special looms till the end of Mar’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 | 1.22 – 1.24 |
| 20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN | 1.06 – 1.08 |
Export Fabric Market:
Limited business activity was seen from Korea, China and Japan during the week.
Suppliers were holding their offers by early of week due to very uncertain market situation and too much hike in local yarn prices however they had started offering prices from middle of the week.
Pak rupees has lot of pressure against USD hence it is declining continuously which make the business more complicated.
Currently good suppliers are booked till end of Feb ~ early of March and offering onward deliveries whereas average suppliers are offering end Feb onward deliveries.
Some of the suppliers are keeping stock in basic items and offering aggressive prices.
Average kind of business activity was observed from European customers however USA market is still slow.
Some of suppliers have received decent quantity of orders from their selected customers in Europe both in narrow and wider width.
Wider width suppliers are booked till mid of March and offering end 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:
Home Textiles overall business activity is on slower side as there are new business placements in the market but volume is very low. We are forecasting that this trend will continue till March and expecting some improvement after March 2023.
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.
As previous stocks are still not utilized for all the customers and this is the reason demand is on slower side and demand can only be determined after all stocks are utilized. It is expected that this trend will be continued till Quarter 1 of 2023.
Garments:
Pakistan’s garment industry, which continues the same phase of recession, is facing a difficult period as its production capacities are not fully covered due to a lack of orders from foreign customers.
General global inflation has prevented buyers from placing bulk orders. However, there is a ray of hope incurred that create some positive sentiments in the market, where some retailer and brands have started placing orders. But it’s just the beginning and will wait for the coming effects.
They find it difficult to predict future demand and are therefore reluctant to place large volumes. At the same time, factories in Pakistan also find it difficult to cover their fixed costs because the units are not fully operational.
At the same time, new developments for SS24 will also be discussed. Factories have space to offer delivery from April 2023 for new incoming requests.
Going Forward:
About the upcoming market, it is evaluated that demand from end customers leads to local yarn prices. Further price liking will be clear after equilibrium in the market and source of dissimilar yarn counts, leading to the price level.
The rate of cotton witnessed an increase of Rs 1,000 per maund as a result of an increase in the rate of the dollar. The business volume also increased relatively. The area under cotton cultivation has decreased from 3.2 million hectares to 2 million hectares. Cotton production has fallen from 14 million bales to a low of 5~6 million bales.
For the coming week, we expect dull activity to prevail for both narrow and wider width fabrics in the local market.
Export yarn market remained firm and stable with upward trend. There has been good buying observed form China and customers booked orders by increasing their prices. European customers remained slow and negotiating prices but demand is decent. So, we might see betterment in business in days to come.
Overall garment industry is facing a tough time and expects betterment in the upcoming months.
For home textile, as the previous stocks are still not utilized for all the customers and this is the reason demand is on slower side and demand can only be determined after all stocks are utilized. It is expected that this trend will be continued till Quarter 1 of 2023.
