Market Report- Pakistan 8 Jan 2024

Pakistan Local Cotton Market:
(Renewed buyer shown their interest in the local cotton market due to a shortage of quality cotton was overshadowed by unexpected price hikes from ginners, leading to slowed business activity. The trend of rising prices, coupled with decreasing cotton stock, indicates the potential for further price increases in 2024, with an estimated total cotton production of around 8.5 million bales)

1- The sluggish pace of the local cotton market picked up this week as buyers facing a shortage of quality cotton, began to show renewed interest. However, despite this demand, ginners unexpectedly raised prices, resulting in a slowdown in business activity.
2- The price of quality cotton showed a upward trend in the previous week, coinciding with a steady decrease in available cotton stock. This diminishing supply raises the possibility of further price hikes in cotton for the year 2024. Projections estimate a total cotton production of around 8.5 million bales.
3- The textile sector faced significant challenges last year, experiencing a continual decline in output. International cotton prices remained volatile throughout the preceding year.
4- Till Dec 31, 2023, Pakistan received 8.17 million bales of seed cotton at ginneries, marking a 77.14% increase from 2022. Punjab saw over 4 million bales arriving, up by 47.66% compared to 2022.
5- Market indicators including futures and yarn prices, mill activity, export sales, and anticipated 2024 plantings mirror those of 2023, suggesting stagnation. Forecasts hint at limited movement in cotton prices until the May contract takes precedence, with on-call data indicating a notable shift around the May/July transition.
6- Last week, cotton prices in Punjab and Sindh rose 1500~2000 per maund due to the shortage of quality lint with ginners, slow business materialized in ranging from Rs 17,500 to Rs 20,000 per maund, (USC 0.76~0.87 lbs) with Phutti prices at
Rs 6,500~8,500 per 40kg. In Sindh, the cotton rate was Rs 17,200 to Rs 19,500 per maund, while in Punjab it ranged from Rs 17,500 to
Rs 20,500 per maund. KCA was up Rs.800 to at Rs. 18,500 per maund and PSF rose Rs.2 to at
Rs. 362 PKR/kg.

Local Yarn Market:
(The Local yarn market is expected to remain stable & firm by next week with constant in prices. Further business activity depends upon count-wise demand from end customers as well as local cotton prices in Pakistan)

1- The local yarn market has improved and rates have increased by Rs.5~7/lbs as compared to last week. Mills are in a better sales position.
2- Mills managed productions as per demand & depleted stocks as carrying costs increased.
3- The prices of PSF were increased by IFL Rs. 2/kg on January 1st 2024 in the domestic market and are expected to rise more by next week.
4- The Faisalabad market had good activity in fine cotton counts plus PC/PV demand also increased.

Count Price in Pak Rupees / 10 LBS Price US$/Bale
16/1 Carded Weaving 3200 – 3300 455 – 470
20/1 Carded Weaving 3350 – 3450 480 – 490
30/1 Carded Weaving 3600 – 3800 515 – 540
20/1 CM 3900 – 4000 555 – 570
30/1 PC Carded Weaving 52:48 3000 – 3150 430 – 450
40/1 Combed Compact Weaving 4400 – 4500 625 – 640
60/1 Combed Compact Weaving 6300 – 6450 900 – 920
80/1 Combed Compact Weaving 8450 – 8900 1205 – 1270
40/1 CVC Carded Weaving 60:40 3700 – 3850 530 – 550

Export Yarn Market:
(The yarn market for exports stayed strong and steady, seeing more business. Locally, the demand for cotton stayed strong too, leading spinners to increase their prices. This suggests that prices might stay the same or go up in the next few days)

1- The export yarn market remains stable with strong business activity.
2- Increased customer inquiries have led to improved business activity.
3- Suppliers raised prices due to better sales coverage and increased demand.
4- Cotton in both domestic and international markets is firm; a price bottom has likely been reached, with a projected rebound.
5- Prices are recovering, and a rise is anticipated soon.
6- Global supply chain crisis has surged freight costs for shipping lines to Europe/USA, potentially significantly increasing yarn prices due to 2-3 times higher freight charges.
7- Chinese customers’ inquiries indicate positive market improvement.
8- European customers are re-engaging, exploring prices, anticipating business improvement during the upcoming Hemitex event.

Export Yarn Prices
Count USD / Bale
16/1 Carded Weaving 490 – 495
20/1 Carded Weaving 500 – 505
20/1 CM 515 – 520
16/1 CM 510 – 515
20/2 CD 530 – 535
24/2 CD 540 – 545

Local Fabric Market:
(The local fabric market was slow during the week and expected to remain slow for coming week as well and the prices might move upward in days to come)

1- In the current week under review, the local fabric market closed with limited trading activity for both narrow and wider-width fabrics.
2- Local finishers shared inquiries and also booked limited orders at increased price levels for narrow and wider-width fabrics after negotiations. However, buyers are still bidding 4%~6% lower, which weavers cannot achieve despite their willingness to book orders.
3- Currently, the weavers have booked their narrow-width looms until early February 2024 and their wide-width looms until end of February’2024, and are offering onward deliveries.

Export Fabric Market:
(Export fabric market remained mixed as there was good flow of inquiries but limited buying was observed. Cost of production increased by the supplier where they will see serious resistance by the customers. Demand is still slow hence suppliers are struggling to survive)

1- Inquiry flow was good from Far Eastern markets. Customers from Korea, Japan, Indonesia, Vietnam and China has exchanged handsome inquiries however limited buying was witnessed.
2- Customer demand is still stagnant hence they are not buying much of quantities now a days
3- Asking prices were increased about 2% due to increase in raw material prices.
4- Most of the suppliers have changed their costing parameters due to increased the cost of their utility bills.
5- The cost of production increased about 15 ~ 20% hence suppliers are offering higher prices than before.
6- Suppliers are booked till end of Jan and offering mid Feb onward deliveries.
7- European and USA buyers are back from their new year holidays and started sharing their inquiries.
8- Customers were mainly checking prices for the upcoming mega event of Heimtex fair held in Germany during next week.
9- Wider width suppliers have also increased their costing flows and offering higher prices now a days
10- Suppliers are booked their wider width looms till mid of March and offering end March 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 1.26 – 1.28 1.26 – 1.28
20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN 1.13 – 1.15 1.14 – 1.16
20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN 0.92 – 0.94 0.96 – 0.98

Bed Linen and Towel:
(At the moment, despite flow of inquiries, order confirmations are mostly at hold which is expected during Heimtex 2024. The main focus of all suppliers is at Heimtex 2024 and further course of action in this sector by suppliers will be decided based on the results of Heimtex 2024)

1- Home textiles sector observed slow flow of inquiries from Europe, USA and NZ. Order confirmation ratio is less than 50%. The Heimtex in January 2024 will be a major event which can unfold a situation that will decide the course of business activity in Home textile sector. At the moment , all suppliers are ready to go at Heimtextil and meanwhile order confirmations against quoted prices are also expected during meetings.
2- One of the other challenge textile sectors is facing is increase in global shipping rates and also predicting months delays due to shipping pause in Suez Canal.

(Because of global economic uncertainty, garment demand is often slow. Orders from the EU and the US were insignificant. The denim industry anticipates orders for sustainable products during the fourth quarter)

1- The Pakistani garment sector is experiencing inconsistent commercial activity, with manufacturers unable to get enough orders to meet their full production capacity. Many retailers and brands have cut their purchasing as a result of inflation.
2- Normally, companies receive projection-based orders from huge retailers in these days, but the market has been slow, with global inflation being one of the reasons. For further orders, factories are delivering in mid-March 2024.
3- Sustainability is crucial in the garment sector for decreasing environmental impact, improving working conditions, satisfying customer demand, enhancing resource efficiency, and future-proofing the industry.
4- From the denim sector, optimistic indications are emerging from the US economy, and the recovery from the epidemic appears to be on track.

Crude Oil:

1- Crude Oil prices opened at USD 70.38 with lower level as compared to last week closing figures. in this week, crude oil prices showed upward trend and closed on higher side by the end of week.
2- In last day of the week, Crude Oil price closed at USD 73.81 with increase of USD 343 cents as of opening figure of week.

  Opening of Week Closing Of Week Change
Price 70.38 73.81 3.43

Exchange Rate:

1- In last week values of Pak rupee appreciated 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 negative note with figure of 1.09 and British Pound closed on positive note with figure 1.27 against USD.

  Selling Buying
LC Sight 280.48 280.43
LC 120 Days 270.55 270.50
Open Market 284.92 278.78

New York Cotton Future:

The New York Cotton futures started the week slight lower than the previous week’s closing figures. NYCF showed mix trend and closed on higher side. The closing figures for the week were:

1- On the last day of the week, MAR 2024 closed at 80.19 with increase of 25 points.
2- On the last day of the week, MAY 2024 closed at 81.35 with rose of 27 points.
3- On the last day of the week, JUL 2024 closed at 82.15 with higher of 29 points.
4- On the last day of the week, OCT 2024 closed at 80.81 by surge of by 48 points.

Liver Pool Indices:

1- Liverpool Index A was opened at 91.40 on same level from the previous week of closing figure.
2- In this week Index “A” showed mix sentiment and closed on lower side by end.
3- At last day of the week, LPI “A” closed at 91.25 with decrease of 15 points.

  Opening of the Week Closing of the Week Change
Index A 91.40 91.25 -0.15