Market Report- Pakistan 30 Oct 2023

Pakistan Local Cotton Market:
(The cotton market faced a challenging week due to global and local factors. The international demand for cotton was low due to inflation and reduced consumer spending on textile goods. The local market, however, managed to register a marginal rise in prices, due to the government support for the farmers. The outlook for the next week is uncertain, as there are no strong indicators for a significant change in the market conditions)

1- The cotton market remained sluggish as global inflation and weak demand for textile products affected the international markets. Despite the low volume of trade, the local market saw a slight increase in prices. This was due to the appreciation of the US dollar and the intervention of the Punjab Chief Minister, who urged farmers not to sell their cotton below 8500 rupees per 40 kg.
2- Due to the reasons mentioned, the prices rose by 1000~1200 rupees per maund this week. The future trend will depend on the upcoming situation, hence, there is no clear reason to expect further increase in prices.
3- The cotton crop is abundant this year and it is expected to exceed 10 million bales. This has reduced the demand for imported cotton and buyers hope that the local supply will suffice. Importing cotton is costly and affects the trade balance.
4- Last week, cotton prices in Punjab and Sindh showed upward trend, business materialized in ranging from Rs 14,000 to Rs 18,000 per maund, (USC 0.61~0.79 lbs) with Phutti prices at Rs 8,500 per 40kg. In Sindh, cotton  rate was Rs 14,000 to Rs 16,000 per maund, while in Punjab it ranged from Rs 15,500 to Rs 18,000 per maund. KCA was up rs.700 to at Rs. 17,000 per maund and PSF remained same at rs. 350 PKR/kg.

Local Yarn Market:
(Good sale was observed in local market as customer bought decent quantities in fear of rise in prices. It is expected to remain firm with restored buying activity demand from customers and reliance on the US dollar trend plus  the increased price of local cotton)

1- The local market for yarn has improved significantly and is now stronger than it was last week. Yarn prices increased by Rs.5~7lbs with good business activity.
2- Mills have stock with prompt delivery for major counts. Specialized options are available in a week time.
3- PSF prices remained stable on the domestic market, and it is expected to remain constant next week.
4- Faisalabad’s market is normal, with average sales of PCs/PVs and apprehensions about cash flow.

Export Yarn Market:
(Export yarn market remained under sluggish tone due to slow demand from all sectors. Despite firm cotton prices, customers remained on side line. Suppliers showed firm sentiment due to good sales coverage in last couple of weeks)

1- Export yarn market remained firm and stable with limited business activity. customers remained on side line of buying.
2- Overall cotton prices in international and domestic market were firm and stable with slight increase.
3- This made suppliers to show stable prices against inquiries and were only showing interest to negotiate in presence of firm bids.
4- Local market behaving well, which put the market condition better.
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 floated handsome numbers of inquiries but order materialization was slow.
8- European customers were checking prices and we might see another phase of buying for the onwards delivery.

Local Fabric Market:
(The local fabric market remained slow as customers remained aside of buying. The prices stared increasing due to rise in yarn prices, For the coming weeks, we suggest buyers cover some portion of their in-hand orders  because market sentiments started reversing and prices may increase from this week onward)

1- In the current week under review the local fabric market remained slow for another week for both narrow and wider width fabrics.
2- Local buyers opted to remain sidelined for another week and did not share bulk inquiries to place their in-hand orders but shared limited inquiries and consequently, the week closed with limited order materialization.
3- Fabric prices started increasing if compared with last week due to the increase of yarn prices. 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 3rd week of November’2023 and have coverage of their wide-width looms until early December 2023 and are offering deliveries from then on.

Export Fabric Market:
(Flow of inquiry improved from Far East, Asian, Europe and USA sectors in export fabric. Suppliers are hopeful to get some orders during next week as prices have touched the bottom level already)

1- Flow of inquiries was increased after mid of the week from all the sectors including Korea, China, Bangladesh, Vietnam, Indonesia.
2- Customers have taken interest into buying and kept on checking prices.
3- Suppliers have their opinion that prices have touched the bottom level and now getting firm with tendency of upward so they are hopeful to get some orders during next week.
4- Currently suppliers are booked till 3rd week of Nov and offering end Nov onward deliveries.
5- European and USA buyers were active as they have exchanged good number of inquiries towards end of the week.
6- Customers have realized that prices are stable and getting firm again hence they were into new buying both of narrow and wider width fabric
7- Suppliers are booked till mid of Dec for wider width fabric and offering end Dec onward deliveries..

Bed Linen and Towel:
(Overall business materialization in home textile sector remained same as previous week with an increase in inquiry flow. Cotton rates raised and USD becomes a bit stable. Institutional business saw good business however retail sector is very slow)

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 that raise a ray of hope in the future business.
3- For new orders, factories are offering Early Jan 24 and onward deliveries.
4- Kingpins Amsterdam remains the most popular B2B denim event in the world which provided an opportunity for the denim mills and brands to meet and make connections.

Garments:
(Pakistan’s garment sector is facing a difficult scenario due to a lack of orders. The increasing cost of production is putting the industry in a more difficult position)

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 that raise a ray of hope in the future business.
3- For new orders, factories are offering Early Jan 24 and onward deliveries.
4- Kingpins Amsterdam remains the most popular B2B denim event in the world which provided an opportunity for the denim mills and brands to meet and make connections.

Crude Oil:

1- Crude Oil prices opened at USD 85.49 a lower level as compared to last week’s closing figures. in this week, crude oil prices showed a mixed 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 85.54 with an increase of USD 0.05 cents as of the opening figure of the week.

Exchange Rate:

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

New York Cotton Future:

1- The New York Cotton futures started the week higher than the previous week’s closing figures. Showed mixed market sentiment this week and closed on higher than the opening figures. The closing figures for the week were as follows:
2- On the last day of the week, DEC 2023 closed at 84.38 with an increase of 65 points.
3- On the last day of the week, MAR 2023 closed at 86.13 with a higher of 67 points.
4- On the last day of the week, MAY 2023 closed at 86.98 with a rise of 50 points.

Liver Pool Indices:

1- Liverpool Index A opened at 94.95 on the same level as last week’s closing figure.
2- This week Index “A” showed mixed sentiment and closed on the lower side
3- On the last day of the week, LPI “A” closed at 94.35 with a decrease of 60 points.