Market Report- Pakistan 23 Oct 2023

Pakistan Local Cotton Market:
(The global cotton industry is facing a downturn due to low demand and currency fluctuations. The local and international cotton prices are declining, reflecting the weak market conditions. Buyers are cautious and selective in their purchases, as they anticipate no significant change in the near future)

1- The cotton market was sluggish as global demand for textile products declined, causing the USD to depreciate. With good cotton supply, buyers only purchased what they needed and avoided stock piling.
2- The local cotton market was steady or soft this week and is expected to stay at these levels in the near future. New York cotton also fell by 275 points in this week. Cotton prices in India, China and Brazil also dropped due to weak global demand.
3- PCGA issued report By October 15, 2023, Pakistan had received nearly six million bales of seed cotton. Sindh contributed the most with over 34.5 million bales, followed by Punjab with over 25.4 million bales and Baluchistan with over 1.4 million bales. More than 5.5 million bales were processed by the ginning factories.
4- The cotton market settled the Friday session with another triple digit loss. Dec was nearly a penny off the daily low, but was still 2.2% weaker for the day and 3.3% lower for the week.
5- The U.S. textile industry wants more scrutiny and testing of Chinese imports, especially those from Xinjiang, where cotton production is linked to human rights abuses.
6- Brazil has overtaken the U.S. as the world’s third largest cotton producer and exporter, challenging the U.S. historical dominance in the global cotton market. The U.S. has lost market share due to two bad crops in a row, while Brazil has increased its production and exports. This is a major shift in the world cotton trade structure.
7- Last week, cotton prices in Punjab and Sindh remained soft , because of good arrival of cotton crop and devaluation of USD, price ranging from Rs 13,000 to Rs 17,000 per maund, (USC 0.59~0.75 lbs) with Phutti prices at Rs 6,500 to Rs 8,000 per 40kg. In Sindh, cotton rate was Rs 13,400 to Rs 17,000 per maund, while in Punjab it ranged from Rs 14,500 to Rs 17,000 per maund. KCA was same at Rs. 16,000 per maund, while PSF dropped rs.10 to at 350 PKR/kg.

Local Yarn Market:
(The local yarn market remained slow and under pressure, It is expected to remain stagnant for some because of local cotton, declining yarn prices, the US dollar trend, and end-user demand)

1- The local yarn market continued to slow in pressure with limited inquiries. Prices were also falling as a result of the falling US dollar, local cotton, and other raw material prices.
2- Customers are merely reserving the necessary yarn, and delivery is offered quickly as most mills carry inventory on all counts.
3- The price of PSF was lowered by IFL Rs. 10/kg on October 16 in the domestic market and for next week is expected to drop even further.
4- Faisalabad’s market is measured, 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 3250 – 3300 470 – 480
20/1 Carded Weaving 3150 – 3450 455 – 500
30/1 Carded Weaving 3475 – 3750 505 – 545
20/1 CM 3850 – 3950 555 – 570
30/1 PC Carded Weaving 52:48 2750 – 2950 400 – 425
40/1 Combed Compact Weaving 4350 – 4450 630 – 645
60/1 Combed Compact Weaving 6200 – 6400 900 – 925
80/1 Combed Compact Weaving 8350 – 8500 1210 – 1230
40/1 CVC Carded Weaving 60:40 3450 – 3650 500 – 530

Export Yarn Market:
(Export yarn market remained slow this week as compared to previous weeks. Major reason was bearish sentiment of cotton in international and domestic market which kept customer in wait and see mode. Customer are  watching cotton prices very cautiously and will plan their next buying as per market conditions)

1- Good number of inquiries were seen in export yarn market with slow business materialization.
2- Suppliers remained flexible and were showing interest in sales of further quantities.
3- Local market behaving well, which put the market condition better.
4- Prices of cotton remained under bearish in line of international cotton prices.
5- Pak rupee against USD is continuously appreciating which is reason for suppliers to not drop their prices sharply.
6- It is expected that yarn prices will show stable sentiment with slight flexibility in presence of firm bids
7- Chinese customers remained in the market and booked orders as per their desired levels.
8- 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 490 – 495
20/1 Carded Weaving 500 – 505
20/1 CM 520 – 530
16/1 CM 520 – 525
20/2 CD 525 – 535
24/2 CD 540 – 550

Local Fabric Market:
(Local fabric market was slow during the week. For coming weeks, we expect the local fabric market to remain slow with limited trading activity for both narrow and wider-width fabrics)

1- The local fabric market showed dull activity for another week for both narrow and wide fabrics.
2- Local finishers and brands showed no interest in buying and shared limited inquiries throughout the week and consequently, the week closed with low demand for both narrow and wide fabrics.
3- Fabric prices were slightly reduced compared to last week due to the slow yarn market. Weavers were hungry for orders but could not book more due to low target prices from buyers.
4- The majority of the weavers booked their narrow-width looms until mid-November 2023 and have coverage of their wide-width looms until the end of November ~ early December 2023 and are offering deliveries from then on..

Export Fabric Market:
(Export fabric market remained mixed with limited buying from Far Eastern, Europe and USA markets. Prices were soft about 2% due to soft yarn prices)

1- Export fabric market remained mixed with limited business activity from Far Eastern customers during the week.
2- Limited buying was notices from China and Korea. There were good quantity of orders from Bangladesh but target prices were much lower thus suppliers could not accept the prices.
3- Asking prices were soft about 2% during the week due to soft yarn prices.
4- Suppliers are booked till early of Nov and offering mid Nov ~ 3rd week of Nov onward deliveries.
5- European customers were in discussion of new orders both narrow and wider width however limited booking was notices.
6- Customers were looking for lower prices that is the reason that only few suppliers could manage target prices.
7- Most of the suppliers are refusing customer targets as it does not match even with the cost of production. Suppliers prefer to stop the looms instead of selling fabric at loss.
8- USA buyers remained mixed with limited number of inquiries resultant limited buying in basic articles.
9- Wider width suppliers are booked till end of Nov and offering early ~ mid 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 1.38 – 1.40 1.36 – 1.38
20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN 1.28 – 1.30 1.26 – 1.28
20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN 1.02 – 1.04 1.00 – 1.02

Bed Linen and Towel:
(For the Home textile front, desperate times need desperate decisions. Some activity is being shown. Bookings have been confirmed at break even or lowest contribution margins)

1- Current week has seen some business activity. Some inquires were matured. Even though dollar is still depreciating but following reasons are compelling mid tier factories to lock bookings.
2- To cover the over heads
3- To keep machines running.
4- Lower cotton prices and decease in fuel prices have given a bit cushion to factories that were in desperate need of business.
5- Bookings being confirmed in these times are either on break even or on very low contribution margin.

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

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 that many retailers and brands have reduced their buying.
2- 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. For onward orders factories are offering Early Jan 2024 deliveries.
3- In the garment industry, sustainability is critical for reducing environmental impact, improving working conditions, meeting customer demand, increasing resource efficiency, and future-proofing the industry.
4- From the denim sector hopeful signals are coming from the U.S. economy, and the recovery from the pandemic seems to have really taken. However, it’s essential to recognize that consumer confidence is still somewhat tempered due to persisting uncertainties in the global landscape.

Crude Oil:

1- Crude Oil prices opened at USD 86.66 a lower level 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.
2- On the last day of the week, Crude Oil prices closed at USD 88.75 with an increase of USD 2.09 cents as of the opening figure of the week.

  Opening of Week Closing Of Week Change
Price 86.66 88.75 2.09

Exchange Rate:

1- In last week values of Pak rupee deprecated against US Dollar, other major currencies showed mix trend in both interbank and open markets.
2- At the end of week, Euro closed on a positive note with figure of 1.06 and British Pound also closed on positive note with figure 1.21 against USD.

  Selling Buying
LC Sight 276.30 276.25
LC 120 Days 263.21 263.16
Open Market 282.09 276.01

New York Cotton Future:

1- The New York Cotton futures started the week lower than the previous week’s closing figures. Showed continuous dropped in this week and closed on lower than the opening figures. The closing figures for the week were:
2- On the last day of the week, DEC 2023 closed at 82.40 with decrease of 275 points.
3- On the last day of the week, MAR 2023 closed at 84.53 with lower of 252 points.
4- On the last day of the week, MAY 2023 closed at 85.68 with drop of 258 points.

Liver Pool Indices:

1- Liverpool Index A opened at 96.25 on higher level than the previous week’s closing figure.
2- In this week Index “A” showed a downward session and closed on the lower side
3- On the last day of the week, LPI “A” closed at 95.95 with a decrease of 30 points.

  Opening of the Week Closing of the Week Change
Index A 96.25 95.95 -0.30