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Prices11 Sept 2017The expected total supply of cotton in China was revised up for the 2017/18 market year by the United States Department of Agriculture, in its August forecast. The upward revision was a result of an increase in expected cotton production, relative to expectations made in July. The expected demand for cotton was also revised upwards, thanks to a boost coming from the domestic market. Cotton prices went up slightly week-on-week in terms of yuan. But trend looks very stable over the longer term, while cotton yarn prices remained stable for some time. YTD Pakistan textile trade surplus in 2017 up to June is still 11.9% below that of the same period the year before. Pakistan’s Karachi cotton prices had a hike week-on-week as a result of rising demand for cotton, following news of damaged crops caused by flooding. China’s textile industry has faced some challenges, as well as positives. The number of industrial firms in China dropped year-on-year in 2016, and the trend continued in 2017 up to June. This is the result of the Chinese government tackling climate change concerns, raising costs of production and leading relatively inefficient firms to bankruptcy. Despite this, investments in fixed assets, and accumulated cotton production of most textile-related products have risen year-on-year, showing positive sentiments in the sector.
Insight11 Sept 2017According to latest provisional figures provided by the State Bank of Pakistan, the country's YTD textile trade surplus dropped 11.9% YoY to $4bn in 2017 up to June, from $4.54bn during the same period the year before.
Insight11 Sept 2017According to latest figures provided by the United States Department of Agriculture (released on 10 August), expected total supply of cotton for the 2017/18 market year was revised up in China, due to an upward revision in the expected production of cotton.
Prices4 Sept 2017The floods in Karachi (Pakistan), and Mumbai (India), have destroyed crops and disrupted business activity within the region, with millions of people affected. By Wednesday 30 August, the Karachi cotton price level in Pakistan dropped 0.8% to Rs5,900 per 37.32kg, from Rs5,950 per 37.32kg quoted on 25 August. In India Gujarat Cotton prices remained stable at INR42,300 per candy relative to the week before. Karachi Cone Cotton Yarn prices remained stable relative to the week before in terms of Rupees. However, the Rupee appreciated against the dollar by 0.14%, placing upward pressure on the dollar price of yarns in the country. Chinese Yuan also appreciated against the dollar by 1.33%, placing upward pressure on the dollar price of Chinese man-made fibres and yarns. Latest figures from the USDA (released on 10 August) show Pakistan’s expected cotton supply in 2017/18 was revised downwards, due to a downward revision in initial cotton reserves. Cotton demand is also expected to be revised downwards as a result of a drop in expected cotton exports. The YTD growth rate of cotton cloth production in China seemed to be rising year-on-year in 2017 up to June, according to accumulated monthly figures provided by the China’s National Bureau of Statistics. This is positive news for producers of cotton fibre and yarn.
Prices29 Aug 2017In India, domestic yarn prices continued to remain stable as low trading activity persisted due to long holidays. Appreciation of the dollar against the INR negatively impacted the price of yarns in terms of dollars, making yarn exports relatively more competitive. The GST tax rate at 5% is also expected to positively impact cotton fibres and yarn production. Latest figures from India’s Office of Textile Commissioner shows India’s year-to-date (YTD) spun yarn, and synthetic fibre production dropped in 2017 up to May, year-on-year. Filament yarn production, however, increased year-on-year during that same period. Better global cotton production and arrivals have suppressed cotton prices in Pakistan in week ending 18th of August. However, following that week, strong demand has pushed cotton prices upwards, but not to the same level as the week before. Supply-side challenges were evident in the cotton market: Pakistan was preparing for its Eid holidays, raising costs of transportation, as sacrificial animals get transported to their destinations. Fresh rains in Sindh and cotton virus attacks in Punjab have also disrupted cotton supply in the week following the 18th of August
Insight25 Aug 2017According to provisional figures provided by India’s Office of Textile Commissioner, year-to-date (YTD) synthetic staple fibre (polyester, acrylic, polypropylene and viscose) production dropped 5.1% year-on-year to 551.77 million kg in 2017 up to May, from 581.14 million kg in the same period the year before.
Prices21 Aug 2017According to the USDA’s July figures, India’s cotton supply and demand for the 2017/18 market year is expected to be positive, as the overall total supply of cotton is expected to rise relative to the previous market year as a result of domestic production and initial stocks offsetting a drop in imported cotton. Production is expected to increase relative to the year before, mostly due to a rise in the harvest area. An increase in demand for cotton in India is expected to be driven by the domestic market, as it offsets a drop in exports. Production and trade surplus are expected to widen in India relative to the year before. The same goes for Brazil, which is expected to see cotton demand and supply boosted by 9.4% year-on-year, also thanks to a boost in initial reserves and domestic production. Like in India, cotton production is expected to be driven mostly by an increase in harvest area. A rise in demand for Brazilian cotton is expected to be driven mostly by exports, as it’s expected to increase by a larger amount than domestic demand relative to the year before. According to provisional figures provided by India’s Office of Textile Commissioner in July, Indian yarn production dropped 0.7% year-on-year in 2017 up to May, from a 0.7% increase in 2017 up to April (revised). The year-on-year drop in YTD yarn production was a result of a drop in cotton yarn offsetting the year-on-year gain in blended yarn. 100% non-cotton yarns also contributed towards the year-on-year drop of total yarns production in India. The price of cotton in India has stabilised at Rs42,200 per candy. The US dollar has once again strengthened versus the INR, allowing increased competitiveness for yarn export prices. Lean demand has allowed domestic prices to remain stable in the yarn market. YTD synthetic fibre production in China moved positively in June year-on-year, but slowed compared to the year-on-year change in YTD production in May.
Prices15 Aug 2017The negative impact of flooding in Gujarat a couple of weeks ago is still being felt, as India’s cotton fibres and yarns prices remains high. The USDA is expecting higher competition for existing cotton supply in China relative to 2016/17 market year as its stock-use ratio drops due to large drop in initial reserves in 2017/18 market year, relative to the year before. This is despite an expected increase in domestic production. Production deficit is expected to squeeze, while trade balance is expected to remain the same. The drop in PKR against the dollar has meant more competitive textile exports, but higher costs of imported inputs. Pakistan’s textile industry has been relying more on imported inputs, so it is struggling to cope with higher costs. Already 30-40% of inefficient firms have closed down. High taxes are causing issues in liquidity – which could have been used to boost investment and increase productivity in the textile export sector.
