Market Report- Pakistan 27 Nov 2023

Pakistan Local Cotton Market:
(The international cotton market faced adversity due to worldwide inflation and reduced interest in textile goods. Despite the slowdown in global trade, local markets maintained consistent pricing. It seems likely that the market will continue to decline in the coming days due to the anticipated lack of increased demand)

1- The Local cotton market remained dull, with buyers stayed away from purchases due to a lack of compelling reasons. Throughout the past several weeks, prices showed consistency, lacking any upward momentum or demand in textile goods. Ginners cautiously managed the sale of high-quality cotton, expecting its high demand in the market, as the cotton season is near to end soon.
2- The production of cotton till now is said to be seventy three lac and seventy thousand bales; however, the total production is expected to be around 90~95 lac .
3- Net sales of 322,200 RB for 2023/2024 were down 2 percent from the previous week and 6 percent from the prior 4-week average. Increases primarily for China (237,300 RB, including decreases of 4,400 RB), Mexico (29,400 RB), Vietnam (24,500 RB, including 1,900 RB switched from Macau), Bangladesh (12,400 RB), and South Korea (9,200 RB), were offset by reductions for Panama (3,500 RB), Macau (1,900 RB), and Pakistan (1,400 RB).
4- Last week, cotton prices in Punjab and Sindh showed firm trend, business materialized in ranging from Rs 16,000 to Rs 18,000 per maund, (USC 0.69~0.78 lbs) with Phutti prices at Rs 8,500 per 40kg. In Sindh, cotton rate was Rs 16,000 to Rs 17,500 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 anticipated to continue lenient and under sale burden due to limited demand and oversupply of yarn)

1- The local yarn market continued to slow in business activity with less demand & Coarse counts are under pressure due to weakened exports of Siro yarn,
2- Mills have stocks in OE & PC/CVC yarn with slow demand.
3- The prices of PSF have remained steady in the domestic market and are predicted to stay the same next week.
4- The Faisalabad market is modest in demand with some PV sales at modified bids, business movement, and cash flow apprehensions lingering

Export Yarn Market:
(Export yarn market remained slow for another week in a row. Customer kept on checking prices against which few deals were closed. However, it seems market already touched rock bottom level and price will not drop further)

1- The export yarn market remained slow due to lack of buying from customer.
2- Although good numbers of enquiries were received from customers but order materialization was slow.
3- Customers are expecting further drop in prices however, it has already touched the bottom level and prices are expected to bounce back from here.
4- Major reason is high cost of production which is causing serious turbulence for suppliers to continue their production on such prices. hence, either suppliers need better prices or they will prefer to close production.
5- At the moment, many suppliers have already cut down their productions and shifting to counts for domestic market as prices are much better there.
6- Chinese customers floated improved numbers of enquiries. Some orders were also placed where customer achieved their required price levels.
7- European customers were also active this week and good numbers of enquiries were received. They have also closed some business for regular and specialized items.

Local Fabric Market:
(For the coming week, we expect the local fabric market to remain slow owing to the unavailability of firm inquiries in the market)

1- In the current week under review, slow activity was reported in the local fabric market throughout the week for both narrow and wider-width fabrics.
2- The flow of inquiries improved for both narrow and wider-width looms but limited order confirmation was observed for both narrow and wider-width fabrics because the buyers are anticipating, the yarn market to ease down in the coming days.
3- Weavers slightly reduced their asking prices owing to soft yarn prices for both narrow & wider-width looms.
4- The majority of the weavers booked their narrow-width looms till 3rd week of December ’2023 and also have coverage of their wide-width looms until early ~ Mid-January 2024 and also booked their special looms till End-January’2024 and are offering onward deliveries.

Export Fabric Market:
(The export fabric market is facing a challenging situation due to the low global demand and the cautious behavior of the buyers. The suppliers are struggling to secure new orders and are willing to compromise on the prices. The market outlook is uncertain and depends on the recovery of the textile industry in the major markets)

1- The global demand for export fabric is low, resulting in slow sentiment among the suppliers.
2- Customers are maintaining their stocks and not making new purchases. Only a few customers placed urgent orders at a lower price level, which the suppliers accepted.
3- Fabric prices remained stable as yarn prices did not change. However, suppliers are ready to accept lower targets to fill their space.
4- Suppliers have only 2~3 weeks of orders and are offering deliveries from late December to early January onwards.
5- There are very few inquiries from European buyers, while Far East and USA buyers are silent. This results in very limited orders being finalized.
6- Wider width suppliers are also looking for new orders due to the low demand, but they are still in a better position and are offering deliveries from late January onwards.
7- European customers are very careful about their stocks and do not want to increase their inventory. They are focusing on buying only urgent orders.

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 was the continuation of last week with little or no change. Overall market sentiment is very slow and the flow of inquiries had also seen a slow trend. Order confirmations were also not stable.

Garments:
(Due to a lack of orders, Pakistan’s garment business is in a tough situation. Things might clear after Christmas holidays)

1- The last quarter of 2023 for the garment industry of Pakistan has no healthy activity in terms of order placement. There has been a severe change and factories have seen a massive reduction in achieving decent order quantities. There was very little demand from the EU and US markets due to inflation and the WAR.
2- Only urgent orders were placed by the customer or the seasonal placements. Overall recession kept the factories worried about how to fill their production space as they have fixed overheads. Things might get clear during the first quarter of 2024 depending upon demand from customers which will turn into final order placements with factories.
3- Overall, factories have delivery accessible 90 to 100 days after order confirmation.
4- With Challenges like fluctuating dollar rates and cotton prices, denim producers are finding it hard to secure customer-required FOB as compared to other denim countries.

Crude Oil:

1- Crude Oil prices opened at USD 77.60 with 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 75.54 with decrease of USD2.06 cents as of opening figure of week.

Exchange Rate:

1- In last week values of Pak rupee apricated 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 1.26 against USD.

New York Cotton Future:

1- The New York Cotton futures started the week lower than the previous week’s closing figures. NYCF Showed mix sentiment in this week and closed on negative side. The closing figures for the week were:
2- On the last day of the week, DEC 2023 closed at 80.39 with increase of 242 points.
3- On the last day of the week, MAR 2024 closed at 80.99 with lower of 26 points.
4- On the last day of the week, MAY 2024 closed at 81.69 with drop of 27 points.
5- On the last day of the week, JUL 2024 closed at 82.24 by reducing of 20 points

Liver Pool Indices:

1- Liverpool Index A opened at 91.40 on higher level than the previous week’s 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 90.90 with a decrease of 50 points.