Cotton fiber and yarn prices are staying very firm in Pakistan, due to a new fall of the rupee having limited the decline of import prices in local currency terms, our correspondent reports. Cotton, viscose and polyester prices are therefore kept rather unchanged, whatever their current decline on the Chinese market, and elsewhere.
– From our Pakistan Correspondent Ahmed Fayz
Cotton prices have slightly dropped in the last days in Pakistan, with the benchmark indicator being down 50 rupees per maund or 0.6%.
If considering the sharp fall of New York’s cotton market, cotton prices have stayed very firm in Pakistan.
This could be due to a new significant depreciation of the rupee in the last days, limiting the fall of cotton import prices in domestic currency terms.
Pakistan is heavily importing cotton in the current period, due to the low level of domestic production this season, and will continue to buy foreign cotton until the start of the new season in July.
Cotton yarn prices have been raised on the domestic market, as a result of the slight rise of cotton prices, although actually falling in US$ terms, after taking into account the decline of the Pak. rupee.
Cotton yarn prices have however remained unchanged on the export market, ignoring the changes of the currency value and a lower level of demand from the Chinese buyers.
Polyester staple fiber prices did not move in the past week, although PSF prices are sharply dropping in China, therefore resulting in lower import prices in Pakistan.
The fall of the rupee is however limiting the decline of PSF import prices in rupee terms and whatever the weakness of the renminbi in the current period (see below chart).
Chinese suppliers have lowered their price offers for PSF to around US$1.05 per kilo, making foreign fiber cheaper than the domestic polyester.
Benchmark 1.4 denier fiber has however stayed unchanged at Rs.190 per kilo in the past seven days.
Gross margins have dropped at domestic polyester plants, due to the rise of production cost after the currency depreciation.
Viscose fiber prices have stopped rising in the last seven days in Pakistan, in line with a fall of import offers in the meantime.
VSF prices should however remain firm in the coming period.
Source: Emergingtextiles
