Market Report- Pakistan 16 Oct 2023

Pakistan Local Cotton Market:
(The local cotton sector faces challenges from reduced textile demand, falling prices, and a stronger PKR. With cautious buyers and essential players in control, uncertainty looms. Ginners are struggling to handle costly  stocks, highlighting the need for adaptive strategies to navigate these conditions)

1- The local cotton industry continued to face substantial challenges, attributed to the restricted demand for textile products and the persistent decline in prices. Buyers kept their distance amid the rising value of the PKR currency, anticipating a further reduction in cotton prices, leading to only essential buyers actively participating while others adopted a cautious approach. Ginners, encountered obstacles in managing the stocks procured at higher rates.
2- Pakistan’s agricultural sector is gearing up for a transformative year with an anticipated 126.6% surge in cotton production. The revelation came to light during the High-Powered Federal Committee on Agriculture (FCA)’s meeting convened to assess the agricultural landscape for the upcoming Rabi Season (2023-24). Its indicate that the cotton production for the 2023-24 season is expected to reach a staggering 11.5 million bales, harvested from an extensive area covering 2.4 million hectares. This marks an increase of 126.6% over the previous season and showcases Pakistan’s ability to achieve substantial growth in its agricultural output, specifically in the cotton sector.
3- Last week, cotton prices in Punjab and Sindh remained on downward side because of good arrival of cotton crop and devaluation of USD, price ranging from Rs 13,000 to Rs 16,500 per maund, (USC 0.57~0.73 lbs) with
4- Phutti prices at Rs 6,500 to Rs 8,000 per 40kg. prices of cotton dropped around 2000~2500 per maund in this week. In Sindh, cotton rate was Rs 13,000 to Rs 16,500 per maund, while in Punjab it ranged from Rs 15,700 to Rs 16,500 per maund. KCA decreased by Rs. 800 to reach Rs. 16,000 per maund, while PSF dropped rs.10 to at 360 PKR/kg.

Local Yarn Market:
(The Local yarn market is anticipated to linger at a measured pace due to waning yarn rates, the US dollar trend, local cotton, and reduced demand from end customers)

1- The local yarn market remained deliberate with partial inquiries. Prices were also on the downward side due to the descending US dollar, local cotton, and other raw material prices.
2- Buyers are only booking the required yarn with quick delivery, and mills also have the stocks available.
3- The price of PSF was reduced by IFL Rs. 10/kg on October 9 in the domestic market and for next week it is estimated to drop further by Rs. 5~7/kg.
4- The demand in Faisalabad’s market is sluggish, with low sales of PCs/PVs and concerns about cash flow.

Count Price in Pak Rupees / 10 LBS Price US$/Bale
16/1 Carded Weaving 3300 – 3400 480 – 490
20/1 Carded Weaving 3200 – 3550 465 – 515
30/1 Carded Weaving 3550 – 3875 515 – 560
20/1 CM 3950 – 4050 570 – 585
30/1 PC Carded Weaving 52:48 2850 – 3050 415 – 440
40/1 Combed Compact Weaving 4500 – 4600 650 – 665
60/1 Combed Compact Weaving 6300 – 6450 910 – 935
80/1 Combed Compact Weaving 8400 – 8500 1215 – 1230
40/1 CVC Carded Weaving 60:40 3520 – 3680 510 – 535

Export Yarn Market:
(Export Yarn market remained firm and stable with improved business activity from China. Customers form Europe remained slow. Suppliers are offering firm but showing flexibility against firm bids)

1- Good number of inquiries were seen in export yarn market with improved business materialization.
2- Suppliers remained firm and stable and didn’t reduce prices and were not in hurry to sale yarn due to the handsome order booking in hand.
3- Local market behaving well, which put the market condition firm.
4- Prices of cotton remained under fluctuation in line of international cotton prices.
5- Pak rupee against USD is continuously appreciating which is another reason for suppliers to remain firm and stable.
6- Overall buyers are digesting the prices as business activity has been improved and suppliers are not dropping prices except in presence of any firm bids.
7- It is expected that yarn prices will show stable sentiment in days to come as well.
8- Chinese customers were remained in the market and booked handsome quantity orders.
9- European customers were checking prices and we might see another phase of buying for the onwards delivery.

Export Yarn Prices
Count USD / Bale
16/1 Carded Weaving 500 – 505
20/1 Carded Weaving 505 – 510
20/1 CM 525 – 530
16/1 CM 520 – 525
20/2 CD 530 – 535
24/2 CD 560 – 565
10/1 CARDED SIRO YARN WEAVING 430 – 460

Local Fabric Market:
(Dull activity was seen in local fabric market during the current week. For the coming week, In the absence of bulk inquiries, we expect slow sentiments for both narrow and wider-width looms)

1- The local fabric market showed slow and dull activity for both narrow and wider-width fabrics in the current week under review.
2- Local buyers and finishers are not showing interest in buying at the current level and expecting a further downtrend in the coming days, resultantly current week closed with limited trading activity for both narrow and wider-width fabrics.
3- Prices are eased down in the current week by approx. 1~2% due to a downward trend in the yarn market.
4- Currently, major weavers are booked in narrow width till mid-November whereas they have coverage of their wider width looms until the end of November’23 and offer onward deliveries. Whereas weavers have coverage of their special looms till early December ~ mid-December’23.

Export Fabric Market:
(Improved business activity was seen both from Far Eastern and European buyers but their target prices were about 5~6% lower than the offers. Average business is expected in coming weeks as well as there is no bulk  demand now a days)

1- Far Eastern customers have exchanged limited number of inquiries with low target prices where only few suppliers have managed prices some how to extend their sales.
2- Customers are asking 3~4% lower than the offered prices whereas suppliers are firm on their prices due to strong PKR and high cost of production.
3- Suppliers are booked for next 2~3 weeks and offering early ~ mid Nov onward deliveries.
4- Improved business activity was seen from European customers as they have placed decent quantities mainly in wider width however their target prices were much lower about 5~6% than the offered prices.
5- USA market remained low as no considerable inquiries were seen during the week.
6- Wider width suppliers are booked till end of Nov and offering 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 1.43 – 1.45 1.40 – 1.42
20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN 1.32 – 1.34 1.30 – 1.32
20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN 1.04 – 1.06 1.04 – 1.06

Bed Linen and Towel:
(USD is at downward spiral. Suppliers and sellers are in great pressure and in order to keep machines running, Two options are at table.  Either close the units or take orders at loss / break even)

1- Current week has seen the same trend as previous one in home textile sector. USD is continuing down the road resulting in hindrance to lock prices. .
2- However, some big suppliers have maintained their bookings due to large fabric inventories and greater holding power. Further to this , bookings and orders were also confirmed in regular programs with large suppliers.

Garments:
(Generally, garment demand is slow due to uncertain economic situations around the globe. Negligible orders received from EU and USA. Denim sector is optimistic about getting more orders during 4th quarter for sustainable products)

1- Many countries have seen a drop in garment demand as people cut back on spending owing to economic uncertainties.
2- Pakistan’s garment sector received few orders from international customers.
3- Normally, factories receive projection-based orders from large retailers, but there has been a slow sentiment in the market in the 4th quarter of 2023, one of the reasons being global inflation.
4- At the same time, factories anticipate BULK ORDERS against the developments they made in the 2nd quarter of 2023. Factories are offering End Dec deliveries.
5- Another huge factor affecting everything from manufacturers to brands to consumers is sustainable and ethical denim. First and foremost, sustainability has become a pivotal concern at all decision-making levels..

Crude Oil:

1- The Crude Oil prices began the week at USD 86.38, higher than the previous week’s closing figures.
2- Its showed a downward trend for most of the week, but rose in the last session and closed higher than the opening figure.
3- The Crude Oil prices ended the week at USD 87.69, an increase of USD 1.31 cents from the start of the week..

  Opening of Week Closing Of Week Change
Price 86.38 87.69 1.31

Exchange Rate:

1- In last week values of Pak rupee appreciated against US Dollar’s, other major currencies showed mix trend in both interbank and open markets.
2- At the end of week, Euro closed on a negative note with figure of 1.05 and British Pound also closed on negative note with figure 1.21 against USD.

  Selling Buying
LC Sight 276.21 276.16
LC 120 Days 262.29 262.24
Open Market 281.74 275.67

New York Cotton Future:

1- The New York Cotton futures started the week lower than the previous week’s closing figures. They declined for most of the week, but rose slightly in the last session. However, they still closed lower than the opening figures. The closing figures for the week were:
2- On the last day of the week, DEC 2023 closed at 86.06 with decrease of 90 points.
3- On the last day of the week, MAR 2023 closed at 87.77 with lower of 83 points.
4- On the last day of the week, MAY 2023 closed at 88.88 with drop of 62 points..

Liver Pool Indices:

1- The Liverpool Index A started the week at 96.65, lower than the previous week’s closing figure.
2- It increased in the next two sessions, but then declined until the last session and closed on the negative side.
3- By the end of the week, the Index A had dropped 140 points and closed at 95.25

  Opening of the Week Closing of the Week Change
Index A 96.65 95.25 -1.40

 

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