Market Report- Pakistan 20 Nov 2023

Pakistan Local Cotton Market:
(Global inflation and lower demand for textile products affected the international cotton market negatively. Even though global trade slowed down, domestic markets kept their prices steady. This stability was due to the rising value of the US dollar and the expected shortage of premium cotton soon)

1- The local cotton market was quiet and buyers stayed away from purchasing. They did not see any positive reason to buy and showed stability in prices in the last week. Quality cotton was in high demand by textile spinners, which kept the prices steady. The ginners sold quality cotton carefully, as it was scarce.
2- The cotton output so far is 73.7 million bales, but it is expected to reach 90 million bales. Cotton arrivals in Punjab were recorded at over 3.4 million bales, or 34,28,915 bales, while Sindh generated over 3.9 million bales, or 39,41,709 bales. The price of quality cotton was stable last week, but the trade volume was very low. The textile sector is facing a worsening financial crisis.
3- According to PCGA’s biweekly data, the cotton season in Pakistan is almost over. However, the market is very slow and textile mills are buying very little.
4- USDA reported that 328,000 bales were sold in 2023-24. China bought the most with 176,200 bales. Mexico and Vietnam followed with 35,000 and 32,200 bales respectively. For 2024-25, 30,400 bales were sold. Mexico topped with 11,200 bales. Guatemala and Honduras came next with 7,100 and 5,500 bales.
5- Last week, cotton prices in Punjab and Sindh showed firm trend, business materialized in ranging from Rs 15,500 to Rs 18,000 per maund, (USC 0.66~0.77 lbs) with Phutti prices at Rs 8,500 per 40kg. In Sindh, cotton rate was Rs 15,500 to Rs 17,200 per maund, while in Punjab it ranged from Rs 16,000 to Rs 18,000 per maund. KCA was same at Rs. 17,500 per maund and PSF remained unchanged at Rs. 360 PKR/kg.

Local Yarn Market:
(The market is expected to remain soft and under sale pressure due to limited demand and oversupply of yarn)

1- The local yarn market dropped in coarse counts due to lackluster business activity from China.
2- This has put pressure on coarse count in domestic market and prices are quite flexible in presence of firm targets.
3- Mills have stocks in OE & PC/CVC yarn with slow demand.
4- The prices of PSF were increased by IFL Rs. 2/kg on November 13 in the domestic market and are expected to increase Rs 2~3 more by next week.
5- Faisalabad’s market is usual, with measured PC/PV yarn sales and concerns about cash flow.

Count Price in Pak Rupees / 10 LBS Price US$/Bale
16/1 Carded Weaving 3200 – 3300 450 – 460
20/1 Carded Weaving 3200 – 3450 450 – 485
30/1 Carded Weaving 3500 – 3750 490 – 525
20/1 CM 3900 – 4050 545 – 565
30/1 PC Carded Weaving 52:48 2950 – 3080 415 – 430
40/1 Combed Compact Weaving 4350 – 4450 610 – 625
60/1 Combed Compact Weaving 6200 – 6400 870 – 895
80/1 Combed Compact Weaving 8400 – 8500 1175 – 1190
40/1 CVC Carded Weaving 60:40 3550 – 3670 495 – 515

Export Yarn Market:
(The export yarn market remained under slow business activity in terms of order confirmation. However, improved demand was witnessed and it is expected that orders will start maturing in weeks to come. Prices are expected to remain in the same range as the market is already touching the bottom level of prices)

1- The export yarn market remained under slow and dull business activity.
2- Customer kept on checking prices but order materialization was limited. Only a few orders were placed where the customer found their desired price levels. Suppliers showed their fullest interest in maturing every inquiry they received and offered quite attractive prices.
3- Overall cotton in domestic and international markets remained soft. 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.
4- Chinese customers floated an improved number of inquiries against which order materialization was dull too. It is expected that business activity will pick up as customers are discussing new orders.
5- European customers floated a better number of inquiries this week. Some deals were matured as well where customers achieved their target prices. It is expected that business will remain better in days to come.

Export Yarn Prices
Count USD / Bale
16/1 Carded Weaving 475 – 485
20/1 Carded Weaving 485 – 495
20/1 CM 505 – 515
16/1 CM 505 – 515
20/2 CD 510 – 520
24/2 CD 525 – 535

Local Fabric Market:
(Local Fabric remained slow with limited enquiries in market. Weavers remained firm in asking their prices due to firm yarn prices. it is expected that market will follow the same sentiment in days to come)

1- The local fabric market remained slow throughout the week for both narrow and wider-width fabrics.
2- Buyers shared limited inquiries for both narrow and wider-width looms and the week closed with limited business materialization and shared inquiries were mainly for price checking.
3- Weavers either remained firm or slightly increased their asking prices as compared to last week due to an increase in production cost and firm yarn prices.
4- Local Brands and finishers are still holding their buying and waiting for the market to ease down.
5- Majority of the weavers booked their narrow-width looms till mid-december’2023 and also have coverage of their wide-width looms until end-December 2023 and also booked their special looms till Mid-January’2024 and are offering onward deliveries.
6- For the coming week, we expect the local fabric market to remain slow but prices still have the tendency to move upward.

Export Fabric Market:
(The current market situation is also affected by the ongoing war situations between Russia – Ukraine & Palestine – Israel. The scenario may last till early of 2024)

1- The export fabric market is facing a low demand from the global buyers, resulting in slow sentiment among the suppliers.
2- Customers are not keen on new purchases and are holding on to their stocks. Only a few urgent orders were placed by some customers at the existing prices.
3- Fabric prices remained stable despite some correction in yarn prices. However, suppliers are willing to consider some lower targets to fill their space.
4- Suppliers are booked for the next 2~3 weeks only and are offering deliveries from 15th to 20th December onwards.
5- There were some inquiries from European and USA buyers, but the actual business was limited.
6- Wider width suppliers are in a somewhat comfortable position and are offering deliveries from End January onwards.
7- European customers are very cautious about their stocks and do not want to increase their inventory.
They are focusing on buying only urgent orders.

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 1.30 – 1.32 1.32 – 1.34
20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN 1.16 – 1.18 1.20 – 1.22
20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN 0.98 – 1.00 0.98 – 1.00

Bed Linen and Towel:
(High production costs , increasing fuel prices and very competitive price points has made this market very tough and struggling Big projections based business and institutional sector is the reason of 80% capacity running in various processing)

1- This week has seen a fair business activity with European flow of inquiries in whites and retail. USD is relatively stable in last 1 to 2 weeks while Overheads and fuel costs are rising rapidly due to which price points and customer targets are very difficult to meet.
2- Processing are being run on 80 to 85% capacities for big suppliers. On the other hand, Faisalabad Market is seeing a situation where suppliers are struggling to achieve targets. Bookings are only being made on break even or just covering the machine costs. Fuel prices and high production costs are making it difficult to keep this sector in a stable and profitable position.

(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- Pakistani garment units are searching for large volumes to fill their production space. Some of the factories have received good orders from their export-based customers. This has provided a gleam of hope for the forthcoming seasons.
2- A few brands are also developing new products for the SS25 season. Factories have begun to re-hire their daily wage labor force.
3- Some of the knitting producers have recently received good orders from retail brands.
4- Overall, factories have delivery accessible 90 days after order confirmation.
5- The denim market leaders are hopeful as they are working on new sustainable developments since the market’s growth will be driven by demand for sustainable denim fabric, and ongoing technological advancements in laser to cut down water costs.

Crude Oil:

1- Crude Oil prices opened at USD 78.26 with slightly higher level as compared to last week closing figures. In this week, crude oil prices showed downward trend and closed on lower side by the end of week.
2- In last day of the week, Crude Oil price closed at USD 75.89 with decrease of USD2.37 cents as of opening figure of week..

  Opening of Week Closing Of Week Change
Price 78.26 75.89 -2.37

Exchange Rate:

1- In last week values of Pak rupee deprecated 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 positive note with figure of 1.09 and British Pound also closed on positive note with figure 1.24 against.

  Selling Buying
LC Sight 285.76 285.71
LC 120 Days 274.15 274.10
Open Market 290.68 284.43

New York Cotton Future:

The New York Cotton futures started the week with a slightly higher than the previous week’s closing figures. NYCF Showed upward sentiment by the start of week, hence later showed some recovery and closed on upper side than the opening figures. The closing figures for the week were:

1- On the last day of the week, DEC 2023 closed at 78.92 with increase of 144 points.
2- On the last day of the week, MAR 2023 closed at 81.51 with increase of 204 points.
3- On the last day of the week, MAY 2023 closed at 82.19 with increase of 178 points.

Liver Pool Indices:

Liverpool Index A was opened at 89.05 on higher level from the previous week of closing figure.

1- In this week Index “A” closed on upper side.
2- At last day of the week, LPI “A” closed at 90.90 with increase of 185 points..

  Opening of the Week Closing of the Week Change
Index A 89.05 90.90 1.85