Market Report- Pakistan 17 April 2023

Pakistan Cotton Market:
During the last week, dullness prevailed as buyers didn’t show interest in buying. There is a stock of about three lac bales in the market; however, most of this cotton is of low quality. The mills are buying cotton as per its quality. The business is mostly on a credit basis as there is a financial crisis in the market.

In whole week the rate of cotton remained stable. Some ginners were taking interest in buying due to the fluctuation in the rate of US dollar, as well as, due to the difficulties in opening Letters of Credit. The rate of cotton was Rs 17,500 to Rs 21,000 per maund. The price of Phutti is in between Rs 7,000 and 9,000 per 40 kg. KCA increased rs. 400 and reached at the level of rs 19,700 per maund. PSF remained same at the level of  373  pkr/kgs.

An alarming decrease in cotton production of more than 25 lac bales is expected and 75 lac bales will have to be imported for local textile mills. At present, import contracts for about 55 lac bales have already been signed. Among the cotton-producing countries, Pakistan has now gone to the seventh place from the fourth. In the local cotton market during the last week the rate of cotton remained stable.

On the other hand, the sugar industry is affecting the cotton crop as the cultivating of sugarcane on the cotton area is increasing day by day. The establishment of housing societies on agricultural land is also a big reason of the shortfall of cotton.

Cotton yarn prices in India increased due to enhanced buying and a recent rise in the natural fibre’s value. Traders said that power loom owners have increased their purchases, contributing to the price increase. Power loom production is expected to increase in the last week of this month as the Ramadan month concludes. Cotton yarn prices remained at previous levels, but demand has improved over the last week.

In the first quarter (Q1) of 2023, small business owners in the US remain concerned about inflation, according to the latest survey by Metlife and US Chamber of Commerce. The survey found that 54 per cent of small business owners continue to cite inflation as their top concern, marking the fifth consecutive quarter that inflation has topped the list of challenges. While perceptions of the national economy have slightly dimmed, most small business owners still feel positive about their own business health and cash flow. The majority (63 per cent) of small business owners report that their business is in good health, which has remained stable since Q2 of last year.US’ online prices in March 2023 fell 1.7 per cent year-over-year (YoY), according to the latest online inflation data from the Adobe Digital Price Index (DPI). This marked the seventh consecutive month of YoY price decreases with over half of the categories (10 of 18) seeing falling prices on an annual basis. On a monthly basis, online prices in March remained flat (up 0.03 per cent).

India’s polyester spun yarn prices have continued to rise due to increased demand and higher raw material costs. Poly spun yarn prices have further increased. Viscose yarn has also experienced a steep increase because of supply shortages. Trade sources note that seasonal polyester yarn consumption is a supporting factor.

The rate of cotton in Sindh is in between Rs 17,500 to Rs 20,000 per maund. The rate of Phutti as per quality is in between Rs 7,000 to Rs 8,000 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 7,500 to Rs, 8,500 per 40 kg.

The price of Phutti was in the range of USC 0.78~0.91 Lbs. (17,500~21,000/ maund).

Opening Of the Week Closing Of the Week Change
Lowest 74.00 77.00 3.00
Highest 85.00 90.00 5.00

Crude Oil:
Crude Oil prices opened at USD 79.74 a lower level as compared to last week’s closing figures.

In this week, crude oil prices showed an upward trend and closed on the higher side by the end of the week.

On the last day of the week, Crude Oil price closed at USD 82.52 with an increase of USD 2.78 cents as of the opening figure of the week.

Opening of Week Closing Of Week Change
Price 79.74 82.52 2.78

Exchange Rate:
In the last week values of Pak rupee deprecated 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 1.11 and the British Pound also closed on a positive note with a figure 1.24 against USD.

Selling Buying
LC Sight 283.57 283.52
LC 120 Days 277.49 277.44
Open Market 288.46 282.25

New York Cotton Future:
New York Cotton futures opened at a lower level on Monday than the previous week’s closing figures.

NYCF showed mix trend in the whole week and closed with the hike in all trading sessions.

On the last day of the week, MAY 2023 closed at 82.86, with an increase of 41 points.

JUL 2023 closed at 82.93 with a gain of 20 points.

OCT 2023 closed at 83.47 with a hike of 36 points.

DEC 2023 closed at 82.80 with a increase of 17 points.

Liver Pool Indices:
Liverpool Index A opened at 94.85 the same level as the previous week’s closing figure.

Index “A” showed an upward trend this week and closed on the higher side by the end of the week.

At the last day of the week, LPI “A” closed at 96.85 with an increase of 200 points.

Opening of the Week Closing of the Week Change
Index A 94.85 96.10 1.25

Pakistan Yarn Market:
The Local yarn market continued unhurried slow in demand & stable in prices by the start of the week following NYCF and the local cotton market. The partial business was settled and no bulk buying before the Eid holidays was seen in the market. The cost of production increased due to a surge in utility bills, markups & other overheads that caused firm yarn prices. Buyers were in a perceiving state & the raw cotton prices in the Global market are followed by NYCF

PSF prices continued stable in the domestic market during the last week ended. PTA and MEG prices remain compassionate in the international market plus the increase of the US $ parity effect in Pak rupees on importing fiber. At the same time, crude oil prices are upward by the end of this week. For next week, PSF prices are expected to remain stable.

The trading market in Faisalabad sees steady sales of PV and Viscose yarns but no interest in PC or 100% Cotton yarn. Challenges with cash flow and financial constraints continue. The stock holdings of the traders were substantial, and the management of the yarn by the owners of the looms was intractable.

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 3350 – 3500 475 – 495
20/1 Carded Weaving 3450 – 3650 485 – 515
30/1 Carded Weaving 3750 – 3900 530 – 550
30/1 PC Carded Weaving 52:48 3000 – 3150 425 – 445
40/1 Combed Compact Weaving 4250 – 4350 600 – 615
60/1 Combed Compact Weaving 5900 – 6100 830 – 860
80/1 Combed Compact Weaving 8000 – 8200 1130 – 1155
40/1 CVC Carded Weaving 60:40 3600 – 3850 510 – 545

Export Yarn Market:
The export yarn market showed decent business activity as customers floated decent numbers of inquiries. Prices remained firm and stable but suppliers were flexible to discuss in presence of firm bids. It has been witnessed that customers remained active and there has been good demand in market. If we generally analyse the situation, suppliers are in comfortable sales position as most of them are sold till end May in coarse count and offering onward deliveries.

Cotton prices in the domestic and international markets remained firm and stable. Yarn prices also continued the sentiment of International market as suppliers want to get orders despite of high cost of production.

as we have been explaining that cost of production has shown sudden rise which is putting significant impact in prices. At the moment, suppliers are trying to survive despite tough market conditions and trying their best to drag their losses till maximum time.

Although suppliers are selling on loss and losing hefty amounts but they are forced to place order in export just to secure their imports.

Chinese customers remained activity throughout the week and floated handsome number of enquiries. Business confirmations also remained decent form customers during the whole week.

low this week due to exhibition in Shanghai.

As this was organized after 4 years and customers were all busy there meeting with suppliers. However, there has not been any significant order placements during fair.

European customers showed improved activity this week and good numbers of orders have been placed. Customers floated inquiries for both normal and specialized yarns against which reasonable deals were finalized.

Count USD / Bale
16/1 Carded Weaving 495 – 500
20/1 Carded Weaving 505 – 510
20/1 CM 525 – 530
16/1 CM 510 – 515
20/2 CD 530 – 535
24/2 CD 540 – 545

Pakistan  Fabric Market:
In the current week under review, the local fabric market showed a tamed and dull trend for both narrow and wider-width fabrics.

Major market players were unable to share bulk inquiries and opted to remain sideline throughout the week and towards the end of the week limited activity was reported in the market whereas prices remained stable for the narrow and wider-width fabrics.

Finishing units are still placing their maximum orders to their own weaving units owing to the unavailability of orders in the Market.

Currently, weaving mills have booked in narrow width till end-April’2023 whereas they have coverage of their wider width looms till Early May’2023 and offer onward deliveries.

Weavers are comfortably booked in dobby looms and are covered till 3rd week of May’2023.

Construction Price US$/YD Ex Mill
16CDX12CD / 108X56 – 63″ 3/1 “S” TWILL PAK CTN 1.33 – 1.35
20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN 1.20 – 1.22
20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN 1.00 – 1.02

Export Fabric Market:
Nominal business activity was observed during the week as customers from China, Korea, Japan and Bangladesh were in discussion of new orders.

Customers especially from Bangladesh was looking for 6~8% lower prices than the offered priced resultant only one or two suppliers could manage the target prices and booked decent quantity of orders.

Asking prices were almost same as of last week due to stable raw material prices.

Good suppliers have managed to cover their sales till end of May however most of the suppliers could maintain their sales for next 2~3 weeks only and offering onward deliveries.

An average buying was witnessed from European customers. The tender business was finalized with decent quantities however the prices were lower about 8~10% than the initial offered prices.

USA buyers remained aside of buying during this week as no considerable inquiries were witnessed.

Wider width suppliers offering same prices as of last week.

The suppliers are booked wider width looms till end of May and offering onward deliveries.

Dobby looms have goods sales coverage hence stripe satin and dobby looms delivery is from end June onward.

Following were 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 1.34 – 1.36
20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN 1.20 – 1.22
20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN 0.98 – 1.00

Bed Linen & Towels:
Home textile business is on slower side due to low activity from worldwide, it is expected that this trend will remain till Mid this year. Overall demand around the globe is on slower side which is effecting business volume in Pakistan and as well as other regions worldwide.

Raw material prices are also increasing due to depreciation of Pakistan Rupee, factories are getting tough time in running factories due to low business volumes.

Globally many countries have experienced a decline in demand for clothing, as consumers have cut back on spending due to economic uncertainty. In terms of order placements, Pakistan’s apparel sector was quite low in getting orders from international customers in the 1st quarter of 2023. Normally, factories received projection-based orders from big retailers but there has been slow sentiment in the market, one of the reasons is global inflation.

At the same time, factories are expecting BULK ORDERS against the developments that they have made in the 1st quarter of 2023. They are expected to start getting orders from April 2023 onwards which will definitely create healthy activity in the market.

Sustainability is crucial in the garment industry to reduce its environmental impact, improve working conditions, meet consumer demand, increase resource efficiency, and future-proof the industry

Going Forward:
It is determined that consumer demand drives local yarn prices with moderate activity. Further price changes will be made in accordance with market conditions and end-user demands, which will determine the price level.

The local cotton market remained dull , business activity remained under pressure. Textile business is not increasing and hitting badly the spinners and ginners. It seems that upcoming weeks will remain slow until the new crop arrival.

Dull trend was seen in local fabric market as customers remained aside of buying. Prices were stable during the week. It is expected that business may start by end of April.

Export yarn market remained firm and stable with good business activity. It is projected that business activity will remain good in days to come as customers are sharing firm requirements which will be conclude din weeks to come.

Average business activity was seen in export fabric market. Customer target prices were about 6~8% lower than offered prices. Suppliers are expecting in improvement of business after couple of weeks.

The garment industry is struggling with orders but there is a ray of hope generating, The situation will clear in 2nd quarter of 2023.

It is expected that activity in Home Textile will remain slow in next quarter of the year, and might improve after June/July 2023.

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