Market Report- Pakistan 6 Nov 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 keep the prices stable, due to the appreciation of USD and the expected shortage of quality cotton in a days to come)

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 remained firm in prices. This was due to the appreciation of the US dollar only and shortage of quality cotton in a days to come.
2- Despite the large sale of cotton bales from the USA to China, the global price of cotton plummeted. The international market for textile products was weak and sluggish. Inflation and rising interest rates also hampered trade and had a negative impact on business.
3- According to the PCGA, cotton arrival in Pakistan increased by 13.3% in the last fortnight of October 2023, reaching 6.791 million bales. This was 83% higher than the same period last year, when floods damaged the cotton crop.
4- Punjab’s cotton arrival increased by 17.7% in the last fortnight of October 2023, reaching 2.994 million bales. This was 44.5% higher than the same period last year.
5- Sindh’s cotton arrival increased by 10% in the last fortnight of October 2023, reaching 3.797 million bales. This was 132.2% higher than the same period last year
6- Last week, cotton prices in Punjab and Sindh showed firm trend, business materialized in ranging from Rs 15,000 to Rs 18,000 per maund, (USC 0.66~0.78 lbs) with Phutti prices at Rs 8,500 per 40kg. In Sindh, cotton rate was Rs 15,500 to Rs 16,200 per maund, while in Punjab it ranged from Rs 16,000 to Rs 18,000 per maund. KCA was up rs.500 to at Rs. 17,500 per maund and PSF remained same at Rs. 350 PKR/kg.

Local Yarn Market:
(Moderate business was witnessed in local yarn market. It is expected to remain stable leading to cotton prices, customer demand, and supplier offers)

1- The local yarn market is steady and stable in asking yarn prices and a moderate level of business activity was seen during the week.
2- Mills have stocks in OE & PC/CVC yarn and some other counts on demand can start after a week time.
3- PSF prices continued unchanging on the domestic market, and it is probable to remain stable by next week as well.
4- Faisalabad’s market is usual, with average sales of PC/PV yarn and concerns about cash flow.

Count Price in Pak Rupees / 10 LBS Price US$/Bale
16/1 Carded Weaving 3250 – 3350 460 – 475
20/1 Carded Weaving 3250 – 3550 460 – 505
30/1 Carded Weaving 3550 – 3800 505 – 540
20/1 CM 4000 – 4100 570 – 585
30/1 PC Carded Weaving 52:48 2850 – 2960 405 – 420
40/1 Combed Compact Weaving 4400 – 4500 625 – 640
60/1 Combed Compact Weaving 6250 – 6450 890 – 915
80/1 Combed Compact Weaving 8400 – 8500 1195 – 1210
40/1 CVC Carded Weaving 60:40 3450 – 3650 490 – 520

Export Yarn Market:
(The export yarn market remained under lackluster business activity due to uncertain cotton prices.
Customers remained on sideline of buying and placed only limited quantity orders where they matched their desired price levels)

1- The export yarn market remained under the clouds of uncertainty due to the bearish sentiment of cotton.
2- Customer kept on checking prices but order materialization was limited. Only few orders were placed where the customer found their desired price levels.
3- Suppliers remained firm in asking their prices. However, they were flexible to discuss orders in the presence of firm bids.
4- Overall cotton in domestic and international markets remained soft.
5- However, the cost of production in Pakistan has increased and at the same time, the USD against Pak rupee is appreciating which is another worry for exporters.
6- Local market behaving well, which puts the market condition better.
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 onward delivery.

Export Yarn Prices
Count USD / Bale
16/1 Carded Weaving 480 – 490
20/1 Carded Weaving 490 – 500
20/1 CM 510 – 520
16/1 CM 510 – 520
20/2 CD 515 – 525
24/2 CD 530 – 535

Local Fabric Market:
(Business activity was improved towards end of the week for local fabric. We  expect improved activity in days to come due to emerging demand from local buyers for both narrow and wider-width fabrics)

1- The local fabric market opened with dull activity however after mid-week buyers showed interest in buying and the week closed with slightly improved activity for both narrow and wide fabrics.
2- Local finishers and brands shared limited inquiries and also booked some orders towards the end of the week and consequently week closed with low demand.
3- Fabric prices either increased or remained firm as compared to last week due to firm yarn prices. Weavers were chasing orders but could not book more due to low target prices from buyers.
4- The weavers booked their narrow-width looms until the end of November’2023 whereas they have coverage of their wide-width looms until mid-December 2023 and are offering onward deliveries.

Export Fabric Market:
(Limited buying was witnessed both in narrow and wider width at lower price levels. Suppliers are expecting more challenges in days to come as the customers are not paying realistic prices whereas supplier prices are on much higher due to increase in their cost of productions now a days)

1- Overall export fabric sector is getting tough due to less number of orders and low target prices from the customers.
2- Few of the suppliers accepted some orders almost on their break even level just to run their looms.
3- The business man community is not happy with the existing prices as it is cash loss for them and it cannot continue for long time.
4- Limited number of inquiries were received from Korea, China, Bangladesh, Vietnam, Indonesia resultant limited buying at lower prices.
5- Suppliers are booked for next 2~3 week and offering early Dec onward deliveries.
6- European and USA buyers were in discussion of new orders mainly for basic items however the target prices are much lower than the existing market price level.
7- Wider width suppliers are somehow in better position than the narrow width sector.
8- Prices for wider width remained stable during the week.
9- Suppliers are booked till mid of Dec and offering end 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 1.31 – 1.33 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 0.99 – 1.01 0.98 – 1.00

Bed Linen and Towel:
A relatively good business activity was seen at value added product line as well as in towels. USD appreciated against PKR and cotton rates remained almost stable resulted in a bit sigh of relief for suppliers)

1- This week has seen a relatively high business activity in home textiles. Big manufacturing units are running on 80% capacities with value added and regular product lines.
2- USD rate relatively gained against rupee since last week which resulted in a bit sigh of relief for Suppliers. However, a slight increase in yarn rates and a major gas inflation will have an impact on prices in coming days.

(Due to low demand from US and EU markets, overall garment factories in Pakistan are running under capacity and are looking for orders to fill their space however it is a ray of hope that some leading garment brands have  started placing orders ahead of Christmas)

1- Garment demand is declining, and meeting manufacturing capacity based on current order intake is problematic. Suppliers are aggressive in capturing orders and discussing every possible way to confirm.
2- As a result of consumers cutting back on spending due to economic uncertainty, demand for clothing has decreased in several nations. Nonetheless, we are expecting orders from the US market following Christmas due to a strong feeling that the existing stock will be sold out.
3- At the same time, factories anticipate BULK ORDERS against the developments they made in the 3rd quarter of 2023. Factories are offering mid-Jan 24 onward deliveries.
4- Sustainability is critical for reducing environmental impact, improving working conditions, meeting customer demand, increasing resource efficiency, and future-proofing the industry.
5- The overall situation of the Denim market seemed slow paced and affording labor with the increasing inflation and fuel prices might be a new challenge for the factories in the coming time.

Crude Oil:

1- Crude Oil prices opened at USD 82.31 a lower level as compared to last week’s closing figures. This week, crude oil prices showed downward trend 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 80.51 with a decrease of USD 1.80 cents as of the opening figure of the week.

  Opening of Week Closing Of Week Change
Price 82.31 80.51 -1.80

Exchange Rate:

1- In the last week values of the Pak rupee deprecated against the US Dollar, and other major currencies showed a mixed 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 1.07 and the British Pound closed on a positive note with a figure of 1.23 against USD.

  Selling Buying
LC Sight 281.52 281.47
LC 120 Days 271.53 271.48
Open Market 286.69 280.52

New York Cotton Future:

1- The New York Cotton futures started the week lower than the previous week’s closing figures. Showed downward sentiment in this week and closed on a drastically lower side 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 79.62 with a decrease of 329 points.
3- On the last day of the week, MAR 2023 closed at 82.12 with a lower of 276 points.
4- On the last day of the week, MAY 2023 closed at 83.18 with a drop of 264 points..

Liver Pool Indices:

1- Liverpool Index A was opened at 95.00 a higher level than the previous week of closing figure.
2- This week Index “A” dropped and closed on the lower side
3- On the last day of the week, LPI “A” closed at 91.30 with a decrease of 370 points.

  Opening of the Week Closing of the Week Change
Index A 95.00 91.30 -3.70