Market Report- Pakistan 9 Oct 2023

Pakistan Local Cotton Market:
(The local cotton market had limited activity, mainly attracting essential buyers due to current demand. Buyer caution stemmed from the declining USD, which may further lower cotton prices. Abundant cotton crop supply is also pressuring ginners. It seems that cotton market will remain under pressure and prices may drop further in a days to come . import of cotton may feasible too for the buyers)

1- The local cotton market saw limited activity, with only essential buyers expressing interest based on current demand. Buyers are hesitant to stock up on cotton due to the ongoing decline of the USD, which could potentially lead to further decreases in cotton prices. The abundant supply of cotton crops is also putting pressure on suppliers.
2- According to PCGA, cotton arrivals at ginning factories reached 5.025 million bales by September 30,
a 71.15% increase from the previous year and surpassing last year’s total lint output of 5 million bales. Textile mills purchased 4.179 million bales, an 80.2% increase, while exporters acquired 0.248 million bales,
a substantial rise from the previous year.
3- In Sindh, cotton arrivals were 2.956 million bales, up 57.31% from the previous season’s 1.879 million bales. In Punjab, cotton arrivals reached 2.069 million bales, up 34% from September 15, 2023, when it was
545 million bales.
4- Cotton prices have been trading between 85 and 90 cents for three months. Last week, they briefly reached 89.89 cents but closed at 87.15 cents. Market behavior suggests it’s influenced by factors beyond fundamentals.
5- Challenges are expected as early harvest results show lower yields. The USDA may reduce crop forecasts, but soft demand and grower pricing will limit price increases.
6- Export sales are disappointing, down 48% from the previous week, with low shipments. Some domestic textile facilities are closing, reflecting reduced demand. Total sales and shipments are significantly below last year’s levels.
7- Last week, cotton prices in Punjab and Sindh remained soft to moderate pace because of good arrival of cotton crop, price ranging from Rs 16,000 to Rs 18,000 per maund, (USC 0.69~0.78 lbs) with Phutti prices at Rs 6,500 to Rs 8,500 per 40kg. In Sindh, cotton rate was Rs 16,400 to Rs 17,800 per maund, while in Punjab it ranged from Rs 17,000 to Rs 18,000 per maund. KCA decreased by Rs. 700 to reach Rs. 16,800 per maund, while PSF dropped to at 370 PKR/kg.

Local Yarn Market:
(The local yarn market is expected to continue at a slow pace due to weakening yarn rates, US dollar trends, and local cotton value)

1- The local yarn market continued unhurried with limited inquiries. Prices dropped by Rs. 5~7/lbs due to the falling trend of the US dollar while local cotton is persistent.
2- Most mills sold yarn for 15 days & have some counts in stock.
3- The prices of PSF were decreased by IFL Rs. 8/kg on October 2 in the domestic market and for next week it is expected to drop further by Rs. 5~7/kg.
4- The Faisalabad market is slow in demand, with shortened PV sales and cash flow concerns.

Count Price in Pak Rupees / 10 LBS Price US$/Bale
16/1 Carded Weaving 3450 – 3550 490 – 505
20/1 Carded Weaving 3400 – 3650 485 – 520
30/1 Carded Weaving 3650 – 3950 520 – 560
20/1 CM 4000 – 4100 570 – 585
30/1 PC Carded Weaving 52:48 2900 – 3150 415 – 450
40/1 Combed Compact Weaving 4600 – 4700 655 – 670
60/1 Combed Compact Weaving 6300 – 6450 895 – 920
80/1 Combed Compact Weaving 8300 – 8450 1180 – 1205
40/1 CVC Carded Weaving 60:40 3620 – 3750 515 – 535

Export Yarn Market:
(Export Yan market remain under nominal business activity as customers have floated handsome numbers of inquiries against which order confirmation remains medium. It is expected that customers will replace good quantity orders in days to come due to the acceptability of prices)

1- The export Yan market have minimal business activity throughout the week as customer slotted good numbers of enquiry against which order materialization was normal.
2- Suppliers remain firm and stable in asking their prices due to stable turn-off cotton prices. It is expected that customers will start buying in days to come due to the acceptability of the current price level.
3- Good business activity is accepted from China and the European sector in the coming weeks. The European market floated a handsome number of inquiry against which order materialization was good.
Chinese customers are expected to come into buying after coming back from the holidays.

Export Yarn Prices
Count USD / Bale
16/1 Carded Weaving 495 – 500
20/1 Carded Weaving 500 – 505
20/1 CM 525 – 530
16/1 CM 520 – 525
20/2 CD 530 – 535
24/2 CD 565 – 570

Local Fabric Market:
(Local Fabric market remained slow as buyers are expecting drastic reduction in prices. Business activity is expected to start once the market is settled down)

1- Local Fabric market remained lackluster, directionless and concluded week in quiet tone with limited trading activity for both narrow & wider-width fabrics.
2- PKR continued its upward journey against US$ and buyers were expecting big correction in fabric prices but weavers reluctant to reduce their asking prices due to which buyers booked their urgent requirements only and resultantly limited business confirmation reported for both narrow & wider width fabrics.
3- Major weavers are showing their desperate for orders and extended their narrow width looms coverage till end-October and also have coverage of their wider-width looms till 3rd week November’23 and offering onward deliveries.

Export Fabric Market:
(Limited buying was noticed in export fabric market. Far Eastern markets were slow however European customers remained in the market with limited buying. Prices remained firm with upward trend)

1- Export fabric market remained slow another week due to less demand from Far Eastern and Asian market.
2- Asking prices remained firm with upward trend due to strong PKR against USD.
3- Customers are looking for better prices but suppliers are offering about 2% more than last week.
4- Suppliers are booked till end of Oct and offering early Nov onward deliveries. Some of the suppliers are in a position to start looms immediately after placement of order.
5- European buyers have shown interest in buying and placed limited quantity of orders both in narrow and wider width
6- USA market remained mixed with limited buying during the week
7- Wider width suppliers are booked till mid of Nov and offering end Nov~early Dec onward deliveries.

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 1.44 – 1.46 1.40 – 1.42
20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN 1.33 – 1.35 1.30 – 1.32
20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN 1.05 – 1.07 1.04 – 1.06

Bed Linen and Towel:
(A slight increase in flow of inquiries of home textile sector was seen but due to depreciation of USD, booking confirmations are still at hold)

1- This week has seen a slight increase in flow of inquiries. However, dollar is continuing to downward spiral so the bookings could not be secured as expected.
2- However, some big suppliers have maintained their bookings due to large fabric inventories and grater holding power. Further to this, bookings and orders were also confirmed in regular programs with large suppliers.

(Due to low demand from US and EU markets, overall garment factories in Pakistan are running under capacity and are looking for order to fill their space however GSP+ status is extended till 2027 that will have great impact on future business)

1- Pakistan’s garment industry is uneven as the manufacturers are unable to receive enough orders to reach their full production capability.
2- Rising costs, competition from other regions, and shifting consumer preferences have all hampered Pakistan’s apparel industry. However, the industry has achieved significant progress in terms of modernization and quality.
3- On the other hand, there is slow demand seen from US and EU markets.
4- Buyers placed some orders, but not in large quantities as they had previously. The good news is that clients are continuing to place new FW24 developments, which provides hope for the future.
5- Pakistan’s GSP+ status is extended till 2027 by the European Parliament. This will allow Pakistan to enjoy duty-free or minimum duty on exports to the EU. That will have great impact on Pakistan’s garment and denim industry.

Crude Oil:

1- Crude Oil prices opened at USD 88.82 with lower level as compared to last week’s closing figures. in this week, crude oil prices showed a downward trend till closing and closed on the lower side by the end of the week.
2- On the last day of the week, Crude Oil prices closed at USD 82.79 with a decrease of USD 6.03 cents as of the opening figure of the week..

  Opening of Week Closing Of Week Change
Price 88.82 82.79 -6.03

Exchange Rate:

1- In last week values of the Pak rupee appreciated against US Dollar’s, other major currencies showed mix trend in both interbank and open markets.
2- At the end of the week, the Euro closed on a positive note with a figure of 1.06 and the British Pound closed on a positive note with a figure 1.22 against USD..

  Selling Buying
LC Sight 280.93 280.88
LC 120 Days 268.78 268.73
Open Market 286.79 280.62

New York Cotton Future:

1- New York Cotton futures opened on the lower level on Monday as compared to the previous week’s closing figures.
2- NYCF showed downward sentiment during the week, while increased on last session but closed on negative notes.
3- On the last day of the week, DEC 2023 closed at 87.14 with a decrease of 61 points.
4- On the last day of the week, MAR 2023 closed at 88.19 with a lower of 40 points.
5- On the last day of the week, MAY 2023 closed at 88.95 with a drop of 23 points.

Liver Pool Indices:

1- Liverpool Index A opened at 98.85 on the same level as last week’s closing figure.
2- In this week Index “A” showed a downward trend and closed on the negative side.
3- On the last day of the week, LPI “A” closed at 97.05 with an decrease of 180 points.

  Opening of the Week Closing of the Week Change
Index A 98.85 97.05 -1.80