Market Report- Pakistan 22 Jan 2024

Pakistan Local Cotton Market:

1- In the local cotton market, business activity came down after Heimtex and prices followed the same pace. Its expected prices in local will remain in same levels in coming days as cotton season is almost over.
2- Seed cotton (Phutti) equivalent to over 8.2 million or exactly 82, 58,115 bales have reached at ginning factories across the country till January 15 2024. Over 8.2 million or 8,202,690 bales have undergone the ginning process i.e. converted into bales.
3- Cotton arrivals in Punjab were recorded at over 4.1 million or 4,158,606 bales. Sindh generated over four million or 4,099,509 bales. Textile sector bought 7,478,002 bales while exporters purchased 292,126 bales. A total of 165 ginning factories were operational in the country. Exactly 487,987 cotton bales of unsold stock were available in ginning factories.
4- Approximately 0.4 million bales have been contracted for import in the last month, with more contracts underway. However, border tensions, particularly at the Pakistan-Afghan border, are causing concerns among importers as numerous vehicles carrying cotton and other commodities are delayed.
5- With the expected reduction in power rates for the textile export sector and potential cuts in markup rates on bank loans, as recommended by the Special Investment Facilitation Council (SIFC), Haq anticipates that the domestic cotton market will intensify, increasing the industry’s reliance on imports.
6- Good-quality cotton kept its high price last week, even though there wasn’t enough of it. Predictions suggest that the total cotton production will be around 8.5 million bales.
7- US. cotton supply tightens, global stocks rise by two million bales in USDA’s January report. Inflation hits 3.9% in December, affecting apparel spending and tightening cotton prices. Despite a bullish outlook in U.S. ending stocks, Brazilian exports surge, challenging the declining U.S. market share.
8- Last week, cotton prices in Punjab and Sindh showed softness and traded in ranging from Rs 17,000 to Rs 20,000 per maund, (USC 0.76~0.89 lbs) with Phutti prices at Rs 6,500~8,500 per 40kg. In Sindh, cotton rate was Rs 17,000 to Rs 19,500 per maund, while in Punjab it ranged from Rs 17,500 to Rs 20,000 per maund. KCA was same at Rs. 19,000 per maund and PSF remained same at rs. 362 PKR/kg.

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

1- The local yarn market remained stable after the increase in yarn prices from last week with the usual business activity.
2- Mills sold yarn two weeks ahead and have no stocks available
3- PSF prices remained stable on the domestic market, and it is expected to remain constant next week.
4- The Faisalabad market is slow with limited activity in fine cotton counts and PC/PV demand improved.

Export Yarn Market:
(Export yarn market remained under good business activity in terms of demand and orders confirmation. It is expected that prices will show improvement as customers are now in mood to place orders and already showed an increase of 3-5% in prices)

1- Export yarn market remained under firm and stable business activity.
2- Suppliers showed firm stance throughout the week due to upward trend of cotton prices in domestic and international markets.
3- Customer showed good interest in buying and kept on checking prices.
4- It has been witnessed that customers also followed this sentiment and increased their target prices to book good quantities.
5- As customers were under wait and see since last couple of weeks but this week, they came in market and booked reasonable quantities with improved prices in anticipation of further increase in days to come.
6- As suppliers were under heavy losses since last more than half of the year so, they were not able to digest more losses going forward. Cotton prices also took sharp rise due to shortage of cotton in Pakistan.
7- Spinning mills are trying to book imported cotton on higher prices to avoid any shortage of stocks. So, it is expected that prices will remained firm and stable with tendency to increase in days to come.
8- However, cost of production in Pakistan has been increased and at the same time, Pak Rupee against USD Is appreciating which is another worry for exporters.
9- Chinese customers floated improved number of inquiries against which order materialization was good as well. Customers have increase their prices to the tune of 2-3% and it is expected that further increased will be witnessed din days to come.
10- European customers floated handsome number of inquiries this week after Heimtex. Customers showed good interest in buying and orders were matured with the increase of 3-5% from previous orders..

Local Fabric Market:
(In the current week under review, the local fabric market showed slow activity and closed with a limited order confirmation for both narrow and wider-width fabrics)

1- In the current week under review, the local fabric market showed slow activity and closed with a limited order confirmation for both narrow and wider-width fabrics.
2- Weaver received an improved flow of inquiries but limited order materialization was observed throughout the week because majority of the inquiries were just for price checking.
3- Weavers reduced their asking prices due to a reduction in yarn prices.
4- Currently, the weavers are booked their narrow-width looms until 3rd week of Feb and their wide-width looms until the end of Mar, and onward deliveries are available with the major weavers.

Export Fabric Market:
(Improved market activity was observed in export fabric both in narrow and wider width fabric. Suppliers are hopeful to get bulk orders in days to come)

1- The export fabric market remained mixed during the week under review.
2- Customers from Korea, China, Vietnam, Bangladesh, Japan were active however limited order finalization was observed.
3- Asking prices remained stable however customers were looking 6~8% lower than the current price level thus no bulk orders were reported.
4- Suppliers are booked till end of Feb and offering onward deliveries. Some of the suppliers have still end Feb deliveries.
5- European and USA buyers were active during the week as flow of inquiry was increased compared to last week resultant decent booking with selected suppliers.
6- Shipping lines has diverted their routs to avoid Red Sea thus increased their freights about 3 times more than earlier.
7- Wider width fabric prices were soft due to better yarn prices in fine counts.
8- Suppliers are booked till end of Mar and offering onward deliveries..

Bed Linen and Towel:
(Heimtex 2024 a positive increase in footfall, surpassing previous levels, signaling the industry’s resilience and potential for the future. There was a notable increase in buyer traffic and the company’s commitment to excellence in textile marketing. We are hopeful to see Heimtex 2024 positive outcomes in the first quarter)

1- At Heimtex 2024 as per details shared by Trade Development Authority of Pakistan (TDAP), Pakistan emerged as the fourth leading exhibiting country, with 273 Pakistani innovators seizing the opportunity to showcase their products, including bed sheets, towels, kitchen linen, and other home textile items on an international stage.
2- Sustainability took center stage, with a dedicated area, the Economy Hub (formerly Green Village) in Hall 12.0. The participating companies aimed to connect not only with European stakeholders but also with a global audience, working diligently to meet international standards.
3- There was a positive increase in footfall this year during the Heimtex, surpassing previous levels, signaling the industry’s resilience and potential for the future.
4- There was a notable increase in buyer traffic and the company’s commitment to excellence in textile marketing.
5- During this week in Home Textiles over all we see the flow of inquiries and sampling requirement from the buyers after Heimtex 2024.
6- We are very hopeful that the order situation in coming days will be improved as compare to the last year.
7- The delays in shipment due to Suez canal problem is still there but we saw an improvement in timelines.

Garments:
(Garment demand is slow due to uncertain economic situations around the globe. Negligible orders received from EU and UK. The denim sector is optimistic about getting more orders)

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 EU and UK markets following Christmas due to a strong feeling that the existing stocks are sold out.
3- At the same time, factories anticipate BULK ORDERS against the developments they made in the 3rd and 4th quarter of 2023. Factories are offering Mid-March 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 labour 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 72.40 with a slightly lower level as compared to last week’s closing figures. in this week, crude oil prices showed an upward trend and closed on the higher side by the end of the week.
2- In the last day of the week, Crude Oil prices closed at USD 73.41 with an increase of USD 1.01 cents as of the opening figure of the week.

Exchange Rate:

1- In the last week values of the Pak rupee appreciated against US Dollar’s, 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 1.09 and the British Pound also closed on a positive note with a figure of 1.27 against USD..

New York Cotton Future:

The New York Cotton futures started the week slightly higher than the previous week’s closing figures. NYCF showed upward 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 83.95 with increase of 262 points.
2- On the last day of the week, MAY 2024 closed at 84.89 with rose of 261 points.
3- On the last day of the week, JUL 2024 closed at 85.32 with higher of 237 points.
4- On the last day of the week, OCT 2024 closed at 81.65 by surge of by 133 points.

Liver Pool Indices:

1- Liverpool Index A opened at 91.65 on the same level as the previous week’s closing figure.
2- In this week Index “A” showed a stable trend and closed on the upper side by the end of the week.
3- On the last day of the week, LPI “A” closed at 92.10 with an increase of 45 points..