Cotton yarn export prices have sharply fallen in Pakistan, over a new decline of the local currency and a need to boost sales ahead of new taxation rules for the textile business, as of July 1st, our correspondent reports.
– From our Pakistan Correspondent Ahmed Fayz
Cotton yarn prices have significantly dropped on Pakistan’s export market due to the new fall of the rupee and the need for suppliers to ship maximum quantities before the start of the new fiscal year from July, 1st.
Benchmark 30s carded has suddenly lost 19 cents per kilo or 6% in the last week, after remaining very firm for weeks.
A new slowdown in sales to the Chinese customers may also explain the new fall of yarn prices in Pakistan, which could remain depressed in the coming period as well.
Yarn offers have however remained relatively firm on the domestic market, being supported by the need for processors to increase their inventories before the start of the new taxation system, as of July 1st.
Market participants share the view that 10% sales tax on cotton fiber and 17% on textile products could result in the textile business slowing down in the second half of the year.
Trading activities have therefore improved on the Faisalabad and Karachi yarn markets and prices of Poly-Cotton (PC) and Poly-Viscose (PV) yarns have increased over the past seven days.
At the same time, cotton fiber prices are staying very firm due to the lack of available quantities at the domestic ginning plants.
In addition, the weakness of the rupee has raised cotton import prices in local currency terms, therefore supporting cotton fiber prices in Pakistan.
Polyester staple fiber prices have remained unchanged in the past week, whatever the slight increase in import offers from the Chinese suppliers.
Benchmark 1.4 denier fiber has stayed stuck at Rs.185 per kilo for the last four weeks, although gross margins have relatively dropped at the domestic polyester plants.
Viscose fiber prices have also not moved in Pakistan due to the uncertain market conditions, as participants are not very clear about the new taxation system.
Source: Emergingtextiles
