According to statistics, Pakistan imported 14,000 tons of cotton in November 2023, a year-on-year decrease of 78.1%. In 2023/24 (August-November), a total of 58,000 tons of cotton were imported, a year-on-year decrease of 71.9%. A medium-sized yarn mill in Punjab Province said that foreign cotton imports fell by more than 70% year-on-year. In addition to the strong rebound in Pakistan’s cotton production this year and the obvious short-term supply surplus, it is also related to the heavy losses of Pakistani yarn mills in 2023/24, weak order intake, and insufficient start-up rate. As a result, cotton consumption continues to be lower than expected.
Due to the continued lack of improvement in domestic downstream demand, Pakistani weaving mills only purchase a small amount of resources to replenish inventory and have a strong willingness to lower prices. In order to cope with losses caused by lower yarn prices and increased production costs, yarn mills have to adopt a low-price destocking model to strive to withdraw funds as soon as possible. Light textile companies in Guangdong, Jiangsu and Zhejiang also reported that the quantity of Pakistani cotton yarn arriving, warehousing and customs clearance has only increased since November. The cost-effectiveness advantage is very attractive to some Chinese cloth mills and middlemen.
According to feedback from a cotton trader in Qingdao, the quantity of Pakistani cotton arriving in Hong Kong and bonded warehouse in November and December for 2023/24 is still relatively large, with a more prominent year-on-year growth, including M 1-1/16, M 1- Various resources such as 3/32 and M1-3/16 have attracted the attention of domestic enterprises spinning medium and low count cotton yarns and low-end cotton yarns.
On December 27th and 28th, the net weight quotations of bonded Pakistani cotton M 1-1/16 (strong 28GPT) and M1-3/32 (strong 28GPT) in Qingdao Port were 83.45 cents/pound and 84 cents/pound respectively. , the import costs under sliding tariffs are 14,920 yuan/ton and 14,865 yuan/ton respectively; while some traders’ M 1-3/16 (strong 30GPT) net weight fixed price is only 85 cents/pound, compared with Tanzania and Argentina Cotton with the same index as other origins has a strong price advantage.
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