Pakistan Cotton Market:
During the last week, In the domestic cotton market, cotton prices were overall soft to downward and business volume was good. Textile spinners continued cautious buying. The stock of cotton is decreasing day by day. Keeping in view textile spinners has continued buying as per their needs, though, they can face difficulties in the form of ending subsidies on energy in case of a deal with IMF. Despite all this, they need cotton to run their mills.
Local cotton prices were soft to down due to the deprecation of US$. The rate of cotton was Rs 18,000 to Rs 20,500 per maund. The price of Phutti is between Rs 8,500 and 10,500 per 40 kg. KCA was dropped rs. 1300 and came at the level of rs. 20,500 per maund. PSF was the same at the level of 345 per/kg.
The Indian market witnessed an upward trend in cotton yarn prices due to improved buying. Spinning mills have increased cotton yarn prices as mills received export orders. However, buyers, i.e., power loom owners were not keen to buy at higher prices. Therefore, trade volume was not high.
After three years of severe volatility, it appears that world cotton prices have finally begun to find some semblance of stability. In the two years since the global pandemic, world prices hit a 12-year low of $1.40 per kg, and an 11-year high of $3.61 per kg, finally settling in the vicinity of $2.25 per kg in recent months. But the hard-won stability hasn’t come cheap, as the current price is trading at a 25 percent premium over the pre-Covid LT average. Either way, the new normal in world cotton prices have had a very stark impact on global fiber demand. According to USDA, world cotton consumption is now projected at a 9-year low (excluding the pandemic year), and at 10 percent lower than peak cotton consumption of 123 million bales (of 217kg), first achieved in 2007, and reached only twice since. In fact, over the past decade, world cotton demand has averaged at 115 million bales, even as prices in the international market averaged $1.80 per kg, and never above $2.25 per kg.
As per the SRO Notification dated February 14, 2023, the Government has increased the Sales Tax Rate to 18% with immediate effect. This increase has impacted the costs. further changes in the Cost of Manufacturing due Mini-budget of Rs. 200 Billion and/or changes in the duties & Tax structure will be reflected in the prices accordingly thereafter as well.
The rate of cotton in Sindh is between Rs 18,000 to Rs 20,000 per maund. The rate of Phutti as per quality is between Rs 8,500 to Rs 10,000 per 40 kg. In Punjab province, the price of cotton was Rs 18,500 to Rs 20,500 per maund, and the price of Phutti was Rs 8,000 to Rs, 10,500 per 40 kg.
The price of Phutti was in the range of USC 0.83~0.95 Lbs. (18,000~20,500/ maund).
|Opening Of the Week||Closing Of the Week||Change|
Crude Oil prices opened at USD 80.14 a higher level than 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 76.34 with a decrease of USD 3.80 cents as of the opening figure of the week.
|Opening of Week||Closing Of Week||Change|
Last week the value of the Pak rupee showed appreciation against US Dollar, and other significant currencies showed a mixed trend in interbank and open markets.
At the end of the week, Euro closed on a positive note with a figure of 1.07 and the British Pound closed on a negative note with a figure 1.20 against USD.
|LC 120 Days||251.95||251.90|
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 a downward trend during the week and closed on the lower side by the end of the week.
On the last day of the week, DEC 2022 closed at 80.25 with an increase of 539 points.
On the last day of the week, MAR 2023 closed at 81.50 with a rose of 429 points.
On the last day of the week, MAY 2023 closed at 82.35 with an upward of 387 points.
On the last day of the week, JUL 2023 closed at 82.16 with a surge up of 290 points.
Liver Pool Indices:
Liverpool Index A opened at 100.85 a higher level than the previous week’s closing figure.
Index “A” showed a mixed downward trend this week and closed on the lower side by the end of the week.
On the last day of the week, LPI “A” closed at 98.25, decreasing 260 points.
|Opening of the Week||Closing of the Week||Change|
Pakistan Yarn Market:
The Local yarn market is stable and steady in prices by the start of the week following NYCF and the local cotton market. Average business activity was seen with a limited flow of inquiry resulting in partial sales & only required yarn was booked. On 15th Feb 2023, the Pakistan government raised the goods and services tax (GST) from 17% to 18% on yarn. Customers were observing to accept these fragments & the raw cotton prices in the Global market are followed by NYCF
PSF prices were increased by Rs.5/kg dated 13th Feb 2023 by IFL in the domestic market. PTA and MEG prices remain lenient in the global market plus the bumpiness of the US $ parity effect in Pak rupees on importing fiber. While crude oil prices were down by the end of this week. For next week, PSF prices are expected to increase.
Faisalabad’s trading market has restricted sales of PV and Viscose yarns. No demand in PC/CVC has been seen and financial crunch and cash liquidity issues remain. Traders were substantial with their stocks and loom holders were in an obstinate 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||3600 – 3700||550 – 565|
|20/1 Carded Weaving||3650 – 3800||555 – 580|
|30/1 Carded Weaving||3850 – 4050||585 – 615|
|30/1 PC Carded Weaving 52:48||3000 – 3150||455 – 480|
|40/1 Combed Compact Weaving||4450 – 4600||680 – 700|
|60/1 Combed Compact Weaving||6150 – 6250||935 – 950|
|80/1 Combed Compact Weaving||8150 – 8450||1240 – 1285|
|40/1 CVC Carded Weaving 60:40||3650 – 3800||555 – 580|
Export Yarn Market:
Export yarn business market activity came down during the week.
Cotton prices showed softness in Pakistan and demand from a local spinner also dropped due to the appreciation of the local currency. At the moment, prices of imported cotton are on the rise, Stuck up of import shipments are also putting pressure on spinners. Spinners want to book cotton from local ginners but the stocks are diminishing speedily as Pakistan is short of millions of bales of crops.
Suppliers increase their prices in the last couple of weeks, but this week, Pak Currency’s appreciation put a significant impact on the market. buyers expected that the prices of yarn will reduce but still, sellers didn’t drop the prices hence, activity came down.
Customers showed less interest in buying, hence, buyers booked required yarn orders only. Spinners were in confusion that how to sell as prices in Pakistan are still on the higher side, energy /cotton and many challenges are a head with spinners.
It seems that business activity will remain moderate in the days to come.
Chinese customers were also on the sideline and didn’t book orders, hence inquiries were there but materialization wasn’t seen. As in China prices of cotton and yarns were dropping, suppliers didn’t reduce the prices because they were facing the currency appreciation difference as well. In this week suppliers were in trouble and confused about the sale.
European customers remained active and floated a decent number of inquiries. Order confirmations were seen and it seems that the market will remain good in the days to come.
|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||480 – 500|
Pakistan Fabric Market:
The local fabric market remained dull throughout the week due to the lack of orders and also uncertain yarn market for both narrow and wider width fabrics.
Finishers opted to remain away from buying and could not share bulk inquires due to downward market sentiments for both narrow and wider width fabrics in the local fabric market. Week closed with slow market sentiments and with limited order materialization for both narrow and wider width fabrics.
PC/CVC yarns availability remained limited and spinners are not ready to book bulk quantities.
Currently, weavers are booked in narrow width till Early March’23 and have booked their wider width looms till mid-March’23 and offer onward deliveries. Weavers have booked their special looms till end Mar’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||1.21 – 1.23|
|20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN||1.05 – 1.07|
Export Fabric Market:
Limited number of inquiries were exchanged by the Far Eastern customers resultant limited booking mainly with Chinese customers during the week.
Customers have still huge stock with them which are slow moving as well as slow demand. This is the reason that they are not into buying since last couple of months.
Asking prices were increased about 2% due to strong PKR against USD and firm in yarn prices.
The PKR appreciated about 4~5% during last two weeks and expected to further appreciate against USD in days to come.
Currently good suppliers are booked for next 30~25 days and offering early Apr ~ mid Apr onward deliveries. Average suppliers are offering 3rd week of Mar onward.
Average flow of inquiries were observed from European and USA markets.
Suppliers booked limited quantity of orders as the order quantities were small.
Wider width suppliers are booked till end of March ~ mid of April and offering onward deliveries.
|Construction||Price US$/YD CNF Far East|
|16CDX12CD / 108X56 – 63″ 3/1 “S” TWILL PAK CTN||1.48 – 1.50|
|20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN||1.34 – 1.36|
|20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN||1.10 – 1.12|
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 April and expecting some improvement after April 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.
Pakistan’s garment industry is going through a difficult period, with many factories having reduced production capacity in absence of orders. Normally factories have future predictions but unfortunately in the current scenario things have changed and they don’t have many projections to fill the factory capacity. However, there is a ray of hope has arisen when a customer starts working on new and big projects, this will clear in the 2nd quarter of 2023.
In general, it has been observed that many major retailers and brands have not participated in building large placements like in previous seasons, according to various sources, the only reason for this is global inflation and lack of demand. The prices for raw materials, dyes, and cotton fluctuate.
Going forward, they have received SS24 Development for next season, which bodes well for Pakistan’s textile industry. The factories are booked until April-23 and offering delivery afterward.
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.
About the upcoming market, it is evaluated that demand from consumers leads to local yarn prices with restrained activity. Further price fondness will be according to the market and end customer requirements leading to the price level.
Cotton trading was good. Ginners were interested to sell and buyers took positions in fear that the import of cotton will be more difficult. Sindh lower area farmers are preparing for the new year crop sowing by the end of the Feb.
Slow business was observed for local fabric during the week. It is expected limited trading activity for both narrow and wider width fabrics with top to bottom trend in coming days as well.
Export yarn business dropped down compared to business activity during last couple of weeks. Spinners were in confusion that how to sell as prices in Pakistan are still on the higher side, there are various challenges like energy and short cotton. European customers were active and booked decent quantities.
For HomeTextile, As past 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.
For Export fabric, average business activity was observed from Far East, Europe and USA market. It is expected that business activity will remain average in days to come as the world wide recession is not over.
Overall garment industry going through a tough phase, at the same time different garment customers are anticipating new projects and the situation will be more clear in 2nd quarter of 2023.