Market Report- Pakistan 6 Feb 2024

Pakistan Local Cotton Market:
(This year’s total cotton production in the country is expected to be around one Crore bales. Apart from 84 Lakh 50 thousand bales, 10 to 12 Lakh bales are unregistered, and about 5 Lakh bales have been damaged by whitefly. Given the circumstances, it is speculated that the price of cotton may rise further in future)

1- The local cotton market experienced a slow business activity in whole week.
2- Needy mills were buying as per their requirement as stocks and crop season is going to end.
3- Textile mills are waiting for the government to reduce the utility tariff from 14 cents to 9 cents. However, they are expecting an increase in gas prices on the instructions of the IMF.
4- Business activities will be restricted next week due to extended holiday by the Govt and elections here in Pakistan.
5- According to the USDA’s weekly export and sales report, 349,400 bales were sold for the year 2023-24. China topped the list by purchasing 133,200 bales, followed by Vietnam with 82,800 bales. Pakistan bought 68,900 bales, securing the third position.
6- (PCGA) revealed that over 8.3 million bales of seed cotton (Phutti) had been delivered to ginning factories nationwide as of January 31. Of these, approximately 8,308,790 bales had been processed into cotton bales.
7- Last week, cotton prices in Punjab and Sindh remained firm from Rs 19,000 to Rs 21,000 per maund, (USC 0.83~0.92 lbs). In Sindh, cotton rate was Rs 19,000 to Rs 20,500 per maund, while in Punjab it ranged from Rs 19,000 to Rs 21,000 per maund. KCA up rs.300 to at Rs. 20,000 per maund and PSF remained same at rs. 365 PKR/kg.

Local Yarn Market:
(Average business activity was observed in local yarn market. It is anticipated that the market will stay pervasive influencing cotton prices, consumer demand, and supplier offers)

1- The local yarn market is stable & firm in yarn prices because of the rise in NYCF & local cotton with average business activity. Mills sold yarn for 2~3 weeks & no ready stocks available.
2- The price of PSF was increased by IFL Rs. 3/kg on January 29th in the domestic market and for next week is expected to remain stable.
3- The Faisalabad market is constant with limited activity. PV yarn is in demand and the rest of cotton counts and PC are deliberate.

Export Yarn Market:
(The export yarn market remained firm and stable with active business throughout the week. Customers remained busy in asking prices and deals have been closed as well. It is expected that the price will remain firm and stable with a tendency to increase more in days to come)

1- The export yarn market remained firm and stable with good business activity.
2- Good numbers of inquiries were floated by customers against which handsome quantity business was closed.
3- Suppliers have increased prices due to better sales and higher demand.
4- Cotton prices, both local and international market showed an upward trend and we may see more rise in days to come due to excellent demand from all regions.
5- This will also impact yarn prices, and suppliers are anticipating further hikes in days to come.
6- The global supply chain crisis has led to higher shipping costs to Europe/USA, potentially causing a significant rise in yarn prices due to 3-4 times higher freight charges.
7- Decent inquiries from China were received against which orders were also closed with improved prices.
8- European customers were actively engaged at the Heimtex event; Pakistan is closely watching potential buyers.

Local Fabric Market:
(Slow market sentiment was observed for local fabric. Customers are still budding 4~5% lower than offered prices. We expect the same trend to continue however prices may have the tendency to move upward or remain firm)

1- In the current week under review, limited trading activity was reported throughout the week for both narrow and wider-width fabrics.
2- Buyers floated limited inquiries but the majority of the inquiries were for price checking and resultantly week closed with limited trading activity for narrow and wider-width fabrics. Buyers are still bidding 4%~5% lower, which weavers cannot achieve despite their willingness to book orders.
3- Currently, the major weavers booked their narrow-width looms until mid-March 2024 and their wide-width looms until the end of March’2024, and are offering onward deliveries.

Export Fabric Market:
(Mixed trading activity was observed in export fabric market for Far Eastern, USA and Europe. Prices remained stable. We expect improved business activity in days to come)

1- The flow of inquiry was increased from Far eastern customers however limited buying was witnessed.
2- Asking prices remained stable with firm tune due to good sales of yarn in domestic and export markets.
3- Suppliers are booked till end of Feb and offering mid Mar onward deliveries.
4- European and USA markets remained mixed with limited number of inquiries.
5- Trading companies are now considering to import fabric on CNF basis instead of FOB due to three times high freight charges.
6- Wider width suppliers are comfortably booked till end of March ~ mid of April and offering onward deliveries.

Bed Linen and Towel:
(A continuation of last week with an expected rise is USD after Elections. Many Home textile suppliers are meeting Hard targets and conforming orders at a lower benchmarks by taking risk regarding USD upward speculation)

1- This week is the continuation of last week where suppliers are accepting the hard targets and orders are being booked at downward spiral. However, the major event will be 8th Feb Election after which, it is being speculated that USD will cross 300. In such scenario, some suppliers which are offering at astonishing low price points are taking risk keeping in view this USD rate speculation.
2- Overall market situation is home textiles is not good for medium and low tier factories. Only vertically composite units with good holding power and financial stability are able to secure orders by aggressive marketing and reasonable investments in research and developments resulting in securing good chunk of orders

Garments:
(Generally, 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 during 2nd quarter for sustainable products)

1- Pakistan’s apparel industry has encountered several difficulties. Recently, Bangladesh, Vietnam, and Cambodia have become more competitive nations for low-cost apparel manufacturing, which has made it difficult for Pakistan to hold onto its market share.
2- On the other hand, dyeing units had a shortage at the end of 2023, but, as time goes on, things are improving as a glimmer of optimism appears as brands and retailers begin to place developments for SS25/FW25 that reflect optimistic attitudes. In the end, that will generate demand in the apparel business and result in orders in the 2024 2nd quarter. However, factories are offering End April 24 onward deliveries.
3- As far as denim, the global market is still fighting inflation and trying to revive yet the manufacturers are hopeful for the upcoming seasons as consumer still has a good amount of demand for a sustainable product and is willing to pay for an environmentally friendly product.

Crude Oil:

1- Crude Oil prices opened at USD 76.78 a lower level as compared to last week’s closing figures. in this week, crude oil prices showed a 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 72.28 with a decrease of USD 4.50 cents as of the opening figure of the week.

Exchange Rate:

1- In the last week values of 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 negative note with a figure of 1.08 and the British Pound closed on a negative note with a figure 1.26 against USD.

New York Cotton Future:

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

1- On the last day of the week, MAR 2024 closed at with increase of 285 points.
2- On the last day of the week, MAY 2024 closed at with rose of 258 points.
3- On the last day of the week, JUL 2024 closed at with surge of 235 points.
4- On the last day of the week, OCT 2024 closed at increase of by 99 points..

Liver Pool Indices:

1- Liverpool Index A was opened at 94.85 a higher level than the previous week’s closing figure.
2- Index “A” showed a downward trend this week and closed on the lower side by the end of the week.
3- On the last day of the week, LPI “A” closed at 94.10 with a decrease of 75 points.