Market Report- Pakistan 29 May 2023

Pakistan Market Report:

Pakistan Local Cotton Market:
(In the local cotton market, the price of cotton remained stable during the week with less business activity, as the textile mills continuously faced a severe crisis)

1Local cotton market remained dull, buyers were away from buying and waiting for the arrival of the new crop with the expectation of a reduction of price in the coming days. On the other hand, Pakistan’s currency devaluation also creates pressure on imports. So overall uncertainty was seen in the market.
2- The new season is going to start and in fact, the arrival of the new cotton crop has partially started.
3-There is uncertainty in the local textile sector after the government has taken back the incentives given to the textile sector which includes gas and electricity on concessional rates, issue of sales tax refunds, and abnormal increase in interest rates. The deepening financial crisis and recession in the USA and European markets are also adversely affecting the textile sector. In this way, the textile sector is in a severe crisis which affects the cotton market also.
4-Last week, cotton prices in Punjab and Sindh held steady at Rs 18,000 to Rs 21,300 per maund(0.76~0.89 Cents) while Phutti prices ranged from Rs 8,500 to Rs 9,000 per 40kg. KCA remained at Rs 20,000 per maund and PSF remained the same at 375 pkr/kgs.
5-The cotton market in India has been faced with serious concerns over dwindling demand. Some traders reported panic in the market, making it challenging to determine the prevailing rates. The general consensus was that cotton prices fell
9~10 % in the past two weeks in India.
6- USDA’s weekly Cotton Market Review showed 20,376 bales were sold this week at an average price of 79.75 cents.  NYCF showed a downward trend in this week, hence recovered on the closing session but closed on the negative side.

Local Yarn Market:
(The local yarn market remain stable in asking prices. Sharp deliveries are available. It is projected that market will remain same & unchanged in terms of prices with limited demand)

1- The local yarn market continued stable in asking prices.
2- Most mills offer quick delivery and certain counts might start within a week.
3- PSF prices remained steady on the domestic market and are anticipated to do so going forward.
4- The trading market in Faisalabad is slow in PC/CVC counts and short in viscose yarn whereas PV is good in demand.
5- The market is projected to remain the same & unchanged in terms of prices with limited demand.

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 3450 – 3575 485 – 500
20/1 Carded Weaving 3500 – 3650 490 – 510
30/1 Carded Weaving 3800 – 3950 530 – 555
30/1 PC Carded Weaving 52:48 3000 – 3100 420 – 435
40/1 Combed Compact Weaving 4375 – 4450 615 – 625
60/1 Combed Compact Weaving 6000 – 6200 840 – 870
80/1 Combed Compact Weaving 8000 – 8250 1120 – 1155
40/1 CVC Carded Weaving 60:40 3700 – 3850 520 – 540

Export Yarn Market:
The export yarn market for showed good business activity. It is expected that market will remain firm and stable with good business activity. suppliers are under comfortable zone and not showing any flexibility)

1- The export yarn market remained under nominal business activity.
2- Customers have floated decent numbers of enquiries against which order materialization was average.
3- Cotton prices remained soft in both Usa and China. This has given no impact on prices as suppliers remained firm and stable due to handsome sales coverage.
4- On the other side, customers also responded in positive manner and didn’t ask for any reduction in prices rather their firm bids remained the same.
5- Good quality suppliers are sold till mid-end July and offering onward deliveries while average quality spinners are sold till end June and offering July shipments.
6- At the moment, suppliers are waiting for the new crop arrival as they are almost ending their existing stocks. So as soon as new crop will start in the market, all spinners will start buying aggressively.

Export Yarn Prices
Count USD / Bale
16/1 Carded Weaving 530 – 535
20/1 Carded Weaving 540 – 545
20/1 CM 565 – 570
16/1 CM 545 – 550
20/2 CD 565 – 570
24/2 CD 590 – 595

Local Fabric Market:
Local Fabric market remained slow with limited activity. We may foresee slow activity for both narrow & wider-width fabrics)

1- In current week under review, the local fabric market remained slow but activity slightly improved for both narrow and wider-width fabrics.
2- Local finishers shared inquiries and also booked orders after tough negotiations however week closed with limited business activity.
3- Fabric prices either remained firm or slightly increased depending on quality and yarn counts
4- Currently, major weaving mills are booked in narrow width till end-June’2023 and they have coverage of their wider width looms till Mid-July’2023~3rd week of July’2023 and offer onward deliveries.
5- For coming weeks, we may foresee slow activity for both narrow & wider-width fabrics.

Export Fabric Market:
(Export fabric for narrow width is going through difficult time with limited business. Wider width business is good. Prices are firm both in narrow and wider width fabric)

1- Export fabric for narrow width remained slow with limited business activity from Korea, Japan and China. Other markets remained almost quiet.
2- Asking prices were firm during the week due to firmness in raw material prices.
3- Suppliers are booked till end of June and offering onward deliveries.
4- European and USA buyers have exchanged limited number of inquiries with limited booking.
5- Wider width suppliers are in good sales position as they have covered their sales till end of July and offering Aug onward deliveries.

Following are the closing rates based on CNF Far Eastern ports:

Local and Export Fabric Prices
Construction Price US$/YD Ex Mill Price US$/YD CNF Far East
16CDX12CD / 108X56 – 63″ 3/1 “S” TWILL PAK CTN 1.30 – 1.32 1.32 – 1.34
20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN 1.18 – 1.20 1.20 – 1.22
20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN 0.96 – 0.98 0.98 – 1.00

Bed Linen and Towel:
(Home textile business remained slow in general however Institutional business was good. Factories are running under capacities. This pattern may remain same for next couple of months)

1- There is less business activity around the world. It appears that this pattern will remain same for June or July 2023.
2- Institutional Textiles receives some orders from Europe, but on the other hand, the country’s recent political unrest made the prices of raw materials uncertain.
3- The average factory is operating between 50 and 60 percent of its capacity, while some may do better or worse than this.
4- There is a financial crisis in the market as a result of poor lifting and business activity, which causes payments to raw material suppliers to be delayed.

(Pakistan’s garment industry facing a tough time in 1st quarter of 2023, but as per the current sentiments, there is a ray of hope that customers will start placing decent volumes in 2nd)

1- Overall Pakistan’s garment industry is facing uneven business activity, where factories are not getting enough orders to fill their 100% production capacities. Due to inflation, it has been observed many retailers and brands have reduced their demands.
2- Some orders were placed by buyers but with small quantities instead of bulk buying as they did previously. However, the good part is customers keep on placing new developments of SS24 that raise a ray of rope in future business.
3- For new inquiries, factories are offering End July 23 and onward deliveries.

Crude Oil:

1- Crude Oil prices opened at USD 71.99, higher than last week’s closing figures.
2- This week, crude oil prices showed mix trend and closed on the upper side by the end of the week.
3- On the last day of the week, Crude Oil price closed at USD 72.67 with an increase of USD 0.68 cents as of the opening figure of the week.

Opening of Week Closing Of Week Change
Price 71.99 72.67 0.68

Exchange Rate:

1- In the last week values of the Pak, rupee deprecated against US Dollar, and other significant currencies showed mix trend in both interbank and open markets.
2- At the end of the week, Euro closed on a positive note with a figure of 1.07 and the British Pound also closed on a positive note with a figure 1.23 against USD.

Selling Buying
LC Sight 285.53 285.48
LC 120 Days 275.47 275.42
Open Market 289.11 282.89

New York Cotton Future:

1- New York Cotton futures opened lower on Monday than the previous week’s closing figures.
2- NYCF showed a downward trend in this week, hence recovered on the closing session but closed on the negative side.
3- On the last day of the week, JUL 2023 closed at 83.35 with a decrease of 197 points.
4- On the last day of the week, OCT 2023 closed at 81.03 with a downward of 329 points.
5- On the last day of the week, DEC 2023 closed at 80.54 with a lower of 284 points.

Liver Pool Indices:

1- Liverpool Index A opened at 97.50 on the slightly lower side from the previous week of closing figure.
2- In this week Index “A” showed a downward tendency and closed on the negative side by the end of the week.
3- At the last day of the week, LPI “A” closed at 97.50 with a decrease of 555 points.

Opening of the Week Closing of the Week Change
Index A 97.50 91.95 -5.55
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