Market Report- Pakistan 25 March 2024

Pakistan Local Cotton Market:
(Despite stable local cotton prices amidst decreased business activity, cautious textile spinners face limited stock availability amid high energy costs. Global cotton prices experienced a decline influenced by increased  production estimates in India and Australia, while varied production forecasts in the United States contribute to uncertainties in the cotton markets’ supply dynamics)

1- The stagnant local cotton market prices this week were a result of subdued business activity. While global cotton prices, which had previously surged, are now experiencing a decline, possibly due to speculative trading.
2- There is an uncertainty surrounding whether international prices will stabilize or undergo further drops. Consequently, there has been no improvement in demand for textile products.
3- The prices of cotton remained stable despite decreased business volume in the local cotton market. Textile spinners are cautious in their purchases due to limited stock availability.
4- The textile sector and industries are already grappling with high energy costs, and the International Monetary Fund (IMF) has urged for further increases in electricity tariffs.
5- Cotton candy prices closed lower by -1.04% at 60,880, driven by various factors impacting supply and demand dynamics in the cotton market.
6- The Cotton Corporation of India (CCI) raised its crop production estimate for the current season, indicating higher expected supply levels. This increase in production, combined with lower demand from mills, contributed to downward pressure on prices.
7- Additionally, Cotton Australia raised its production estimate for the year due to favorable weather conditions, further adding to the supply outlook.
8- In the United States, cotton production forecasts for the current season were revised lower based on recent data, with reduced ending stocks projected.
8- However, the global cotton supply and demand estimates for the year showed higher production, consumption, and trade, albeit with lower ending stocks. Increased production in India offset declines in the United States and Argentina, while higher consumption in China and India boosted global demand.
9- Last week, cotton prices in Punjab and Sindh showed firmness from Rs 20,500 to Rs 22,500 per maund
(USC 0.89~1.00 lbs). In Sindh, the cotton rate ranged from Rs 20,500 to Rs 22,500 per maund, while in Punjab it ranged from Rs 20,700 to Rs 22,500 per maund. KCA was the same at . Rs. 21,500 per maund, and PSF remained the same at Rs. 367 PKR/kg.

Local Yarn Market:
(Limited business activity was observed in local yarn market. The prices were stable. It is expected to remain steady and slow, with business activity relying on end customer demand and local prices)

1- The local yarn market’s prices remained stable, with limited business activity. However, mills curtailed production due to inflated costs and bank markups.
2- PSF prices remained stable this week and are expected to remain stable by next week as well.
3- The Faisalabad market had limited activity in fine cotton and PC/CVC whereas PV & 100% cotton counts are in demand.

Export Yarn Market:
(Export yarn market remained under improved business activity as customers have started to place orders actively. Suppliers were also interested to sell good quantities in presence of firm bids)

1- Improved business activity was observed in export yarn market.
2- Customers floated good numbers of enquiries against which business has been confirmed as well.
3- Generally suppliers are now showing slight flexible tone and trying to catch any orders which is coming near to offered prices.
4- Cotton prices in Pakistan are stable as crop has been finished and suppliers have to import cotton from other origins which is causing high prices.
5- At the same time, cost of production is hitting spinners very badly. Many suppliers are planning to close their productions before arrival of new cotton crop due to severe losses.
6- It is expected that market will show good business activity in days to come as now prices are getting settled and both customers and suppliers are coming to agreement where business will be closed.
7- Chinese customers remained in market and some business was also closed.
8- European customers are sharing their requirements and decent numbers of orders are going to close soon.

Local Fabric Market:
(Local fabric market exhibited a sluggish pace. Looking ahead, for the coming weeks suggests a continuation of slow sentiments and range-bound activity across all fabric widths)

1- During the current week under review, the local fabric market exhibited a sluggish pace, and limited trading activity was reported for both narrow and wider-width fabrics.
2- Local finishers and brands shared limited inquiries. Resultantly week closed with limited business materialization for both narrow and wider-width looms.
3- The weavers kept their asking prices the same if compared with last week.
4- Presently, weavers have secured bookings for narrow-width looms until the end of April, while wider-width looms are anticipated to be booked until early May 2024, with respective onward deliveries being offered.

Export Fabric Market:
(Improved business was observed in export fabric after the prices were reduced about 3~4%, supporting soft yarn prices. Suppliers are expecting active sales in the days to come)

1- Average business activity was seen in the export fabric market. Some of the suppliers successfully sold decent quantities into Korea, China, and Japan.
2- The prices are getting stable with a soft tone, which is a good sign as customers were looking for lower prices to place their regular orders.
3- Suppliers are expecting to have bulk orders in the coming weeks once fabric prices are further reduced.
4- Currently suppliers are booked till mid of April and offering end April onward deliveries.
5- European and USA buyers were aside from buying during the week, both for narrow and wider widths.
6- The yarn prices are getting soft, thus suppliers have reduced their fabric prices by 3~4%.
7- Wider-width suppliers are booked till the end of April and offering early ~ mid-May onward.

Bed Linen and Towel:
(A very reasonable chunk of demands and inquiries are still there from the west in the market, but the order conversion ratio is 10 to 15% due to severe inflation and rising energy costs coupled with the exchange rate and interest rate. The government needs to take immediate steps for the revival of this industry by giving relief on energy costs, tax rebates, and necessary subsidies)

1- Despite a reasonable flow of inquiries, there are no significant order confirmations due to very high-cost parameters.
2- There is still room for revival in the home textiles industry because the right demand is there and there is a continuous knock on the doors of industries with concrete targets.
3- The government needs to take immediate action to provide necessary subsidies on energy costs as well as tax and interest rate reliefs in order to keep this industry running.

Garments:
Generally, garment demand is slow due to uncertain economic situations around the globe. Negligible orders received from EU and USA. The denim sector is optimistic about getting more orders for sustainable products)

1- As a result of economic uncertainty, some countries have seen a decrease in garment demand as consumers cut back on spending.
2- In terms of order placements, Pakistan’s garment industry received a negligible number of orders from European and US customers.
3- Normally, factories receive projection-based orders from large retailers, but the market has been slow, owing in part to global inflation.
4- Factory deliveries are available from End June onward.
5- In the denim sector, the worldwide market is still striving to recover from inflation, but manufacturers are optimistic about the next seasons since consumers still have a high demand for sustainable products and are prepared to pay a premium for environmentally friendly products.

Crude Oil:

1- Crude Oil prices opened at USD 82.72 a higher level as compared to last week’s closing figures. in this week, crude oil prices showed an upward trend and closed on the lower side by the end of the week.
2- In the last day of the week, Crude Oil prices closed at USD 80.63 with a decrease of 2.09 USD cents as of the opening figure of the week.

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 positive note with figure of 1.08 and British Pound also closed on negative note with figure 1.26 against USD.

New York Cotton Future:

The New York Cotton futures started the week higher than the previous week’s closing figures. NYCF showed a downward trend in this week and closed on lower side by the end of week.

1- On the last day of the week, MAY 2024 closed at 91.53 with a decrease of 304 points.
2- On the last day of the week, JUL 2024 closed at 91.85 with a drop of 241 points.
3- On the last day of the week, OCT 2024 closed at 85.61 with a reduction of 120 points.
4- On the last day of the week, DEC 2024 closed at 83.95 by rose of 14 points.

Liver Pool Indices:

1- Liverpool Index A was opened at 98.45 on lower level than the previous week’s closing figure.
2- In this week Index “A” showed a downward trend and closed on the lower side by the end of the week.
3- At last day of the week, LPI “A” closed at 97.00 with a decrease of 145 points.