Market Report- Pakistan 3 June 2024

Pakistan Local Cotton Market:
(The local cotton market prices rose last week but are now under pressure due to significant drops in ICE cotton prices and the impending arrival of the new crop. Business volume remains low as buyers wait for more substantial crop arrivals. Additionally, the new cotton season has seen a concerning shortfall in sowing, particularly in south Punjab’s core cotton belt)

1- In the local cotton market, prices rose last week due to news of crop shortages and an upward trend in international cotton prices. However, this week, ICE cotton prices have dropped significantly due to various factors.
2- If international prices remain at these lower levels, local cotton prices are likely to decrease in the coming days as the new crop arrives.
3- Business volume remained low as buyers are awaiting the arrival of the new crop. Although partial arrivals have begun and a few ginning factories are now operational, activity remains subdued.
4- The new cotton season has started, with three ginning factories—one in Punjab and two in Sindh—beginning operations. However, only 3.4-3.5 million acres have been sown against the target of 4.15 million acres, a shortfall of about 19%.
5- This is particularly concerning in south Punjab’s core cotton belt (DG Khan, Multan, Bahawalpur), which accounts for 85% of the province’s cotton area. The sowing targets in these divisions fell short by 34%, 30%, and 23% respectively.
6- ICE cotton lost previous gains on Wednesday due to profit booking amid slow demand.
7- Market sentiments were dampened by favorable weather conditions, a stronger dollar, and weak crude oil.
8- The hawkish Federal Reserve stance also negatively impacted US cotton, resulting in a poor performance overall.
9- The US dollar index climbed after the hawkish Fed stance, leading to the dollar index settling above 105 levels. This made cotton purchases expensive for foreign buyers. Crude oil prices also slid nearly one per cent, which softened the polyester value chain and negatively impacted cotton trade.
10- Last week, cotton prices in Punjab and Sindh showed firmness from Rs 20,000 to Rs 22,000 per maund, (USC 0.88~0.99 lbs). In Sindh, cotton rate was Rs 20,000 to Rs 21,500 per maund, while in Punjab it ranged from
Rs 20,500 to Rs 22,000 per maund. KCA remained same at Rs. Rs. 19,700 per maund and PSF remained same at Rs. 367 PKR/kg.

Local Yarn Market:
(Limited business activity was observed in local yarn market. It seems that typical activity and stable prices will be expected in the market. Furthermore, the trend will subside by the next week)

1- The local yarn market remained steady with consistent yarn prices and minimal business activity.
2- Mills handle production and sales with prompt deliveries and don’t keep large inventories.
3- PSF prices remained stable this week and are expected to continue stable by next week.
4- The yarn market in Faisalabad had average activity with soft prices in PV and other cotton yarns.

Count Price in Pak Rupees / 10 LBS Price US$/Bale
16/1 Carded Weaving 3200 – 3300 465 – 480
20/1 Carded Weaving 3350 – 3450 485 – 500
30/1 Carded Weaving 3850 – 3950 560 – 575
20/1 CM 4100 – 4200 595 – 610
30/1 PC Carded Weaving 52:48 3300 – 3450 480 – 500
40/1 Combed Compact Weaving 4600 – 4700 670 – 680
60/1 Combed Compact Weaving 6200 – 6300 900 – 915
80/1 Combed Compact Weaving 8400 – 8600 1220 – 1250
40/1 CVC Carded Weaving 60:40 4050 – 4150 590 – 600

Export Yarn Market:
(Export yarn market showed handsome business activity as customers floated quite a good numbers of inquiries against which order materialization was witnessed as well. We might see reasonable number of business to be confirmed in days to come)

1- Export yarn market showed decent business activity as customers remained in market and kept on floating inquiries.
2- Supplier showed their fullest interest to catch orders in presence of firm bids. We might see good business activity in weeks to come during the month of June.
3- Cotton prices showed mix sentiment as week opened with firm note and it showed quite a drop after mid of the week.
4- Suppliers are trying to catch any order which is serious buying from customers and showing their flexible attitude to catch orders.
5- Chinese customers floated decent numbers of inquiries against which orders we finalized as well.
6- European customers were actively floating inquiries for normal and specialized items. Some placements have been witnessed and we might see more order to be closed which are under discussions.

Export Yarn Prices
Count USD / Bale
16/1 Carded Weaving 525 – 530
20/1 Carded Weaving 540 – 545
20/1 CM 545 – 550
16/1 CM 540 – 545
20/2 CD 580 – 585
24/2 CD 595 – 600
10/1 CARDED SIRO YARN WEAVING 420 – 455

Local Fabric Market:
(The local fabric market showed improved business activity during the week. The processing units booked decent quantity of orders after tough negotiation. For the coming week, we may forecast improved activity for both narrow-width and wider-widths due to the arrival of fresh cotton crop)

1- In the current week under review, the local fabric market showed improved activity despite the fabric market showed a slight uptrend for both narrow and wider-width fabrics.
2- Local finishers and buyers shared bulk inquiries and also booked some orders after tough negotiation at last week’s price level or at slightly improved rates, owing to firm yarn prices.
3- Weavers have secured orders for their narrow-width looms until the end of June 2024, and for their wide-width looms until mid-July 2024, offering delivery dates beyond these periods.
4- Special dobby and Jacquard looms are booked until end august and offering onward deliveries.

Export Fabric Market:
(The recent surge in demand from the Far Eastern, Chinese, and European markets is indeed a positive development for the export fabric industry. Suppliers receiving bulk orders and extending their sales coverage for the next 50~60 days is a clear sign of a robust market. However, with the forecast that suppliers may increase their prices and hold firm against customer target prices which leads to slower business in days to come)

1- The export fabric market has been quite vibrant recently.
2- The influx of bulk orders from customers in Asia, the Far East, and China is a positive sign, indicating a resurgence in business activity.
3- Asking prices remain stable and firm due to firmness in raw material prices.
4- It’s interesting to note that despite the price sensitivity, transactions were successful with a slight adjustment in the final prices, settling at about 2~3% lower than the initial asking prices.
5- Currently good suppliers are fully booked until the end of July and are now offering early August onward deliveries reflects the good demand in the market. However, few suppliers have some space for mid ~ end July deliveries.
6- The European sector has shown a strong demand as suppliers received bulk orders for both narrow and wider width fabric.
7- This uptick in orders has brought a sense of optimism among suppliers, who have been waiting for such a positive shift in the market.
8- On the other hand, the USA market has experienced a slower pace, with no significant orders reported during the week.
9- Despite this, the prices for wider width fabrics have remained stable, indicating a firm market despite the lack of momentum in the US.
10- It’s noteworthy that customers have engaged in tough negotiations, managing to close deals at about 3~4% lower than the offered prices.
11- This level of negotiation skill is crucial in a market where every percentage point can significantly impact profit margins.
12- Wider width suppliers are offering now the deliveries from End Aug onward due to good sales coverage..

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 1.40 – 1.42 1.38 – 1.40
20CDX16CD / 128X60 – 63″ 3/1 “S” TWILL PAK CTN 1.28 – 1.30 1.26 – 1.28
20CDX20CD / 108X58 – 63″ 3/1 “S” TWILL PAK CTN 1.05 – 1.07 1.04 – 1.06

Bed Linen and Towel:
(For home textile, the flow of inquiries is reasonable. Despite demand in EU and west, order conversion ratio is 20 to 30% due to unmeet able price points. Anticipation of decreased cotton yarn rate will help to decrease the  gap in prices and orders may placed in good volume)

1- Home textile industry is observing a relative more activity and running processing at the rate of 60% to 70% capacities on average with some vertical composite units running at 80% capacities as well.
2- Flow of inquiries is still reasonable and there is a certain demand in EU market as well but like the previous weeks, price points are too hard to meet by Home textile industry hence reducing the order confirmations and limiting to only 20 to 30% relative to inquiry receipt ratio.
3- The bookings that are being confirmed are done at very sharp price points reducing significant profit margins.
4- Further it is anticipated that cotton rate will decrease that will help a bit to decrease the target price and cost price gap.

Garments:
(Overall, Pakistani garment manufacturers are running at good capacity and waiting for orders to fill the rest of the space also anticipating more orders; nevertheless, there is some hope that some of the country’s top retail brands have started placing orders with specific units)

1- Pakistani clothing manufacturers seek high-volume buyers to occupy their manufacturing space.
2- Several of the export-oriented clients have placed favorable orders with them.
3- Well-known international clothing brands have also started to place orders. This has given a glimmer of optimism for the upcoming seasons.
4- A few companies are also creating new developments for the FW25 collection.
5- Recently, retail brands have placed some good orders with some knitting producers.
6- In general, factories offer deliveries at the end of Aug 2024.
7- As the demand for sustainable denim fabric and continued technological breakthroughs will drive the market’s growth, the leaders in the denim industry are optimistic and are working on new sustainable developments.

Crude Oil:

1- Crude Oil prices opened at USD 78.48 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 76.99 with decrease of 1.49 USD cents as of opening figure of week..

  Opening of Week Closing Of Week Change
Price 78.48 76.99 -1.49

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 positive note with figure 1.27 against USD.

  Selling Buying
LC Sight 275.55 275.50
LC 120 Days 259.90 259.85
Open Market 281.29 275.22

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 throughout the week and closed on a lower note by the end of the week.

1- July 2024 closed at 76.15, down 628 points from the previous week.
2- October 2024 closed at 76.58, experiencing a downward of 506 points from the previous week.
3- December 2024 closed at 75.11 showing a lower trend of 401 points from the previous week.
4- March 2025 closed at 76.79, drop by 381 points from the previous week.

Liver Pool Indices:

1- Liverpool Index A was opened at 90.85 on higher level from the previous week of closing figure.
2- In this week Index “A” showed upward trend and closed on higher side by the end of week.
3- At last day of the week, LPI “A” closed at 90.10 with decrease of 75 points.

  Opening of the Week Closing of the Week Change
Index A 90.85 90.10 -0.75

 

 

 

 

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