According to reports from some cotton yarn traders and weaving factories in Guangdong, Jiangsu and Zhejiang, since the beginning of September, Pakistani yarn mills and cotton yarn exporters have begun to suspend quotations/sales of shipments to the Chinese market and Chinese customers. Affected by this, the quotations of port bonded and customs cleared Pakistani 8S-16S siro spinning yarn and 20S-32S cotton yarn have also been reduced, and traders’ “wait for price” mentality has increased. Some fabric factories that received traceability orders had to shift their inquiry and purchasing focus to Vietnamese yarn, Indonesian yarn and Indian yarn.
A textile import and export company in Foshan stated that the reasons for the sudden suspension of quotations/exports of Pakistani cotton yarn to Chinese buyers can be summarized as follows:
First, Pakistan has suffered the largest flood since mid-June. So far, 33 million people have been affected and at least 1,325 people have died. The United Nations has warned that conditions are expected to worsen in the coming days. This has caused great damage to the raw material procurement, cotton yarn production and sales, transportation, etc. of some cotton mills in Sindh and Balochistan provinces of Pakistan.
Second, due to energy outages, shortages of natural gas and electricity, and high domestic cotton prices in Pakistan, the overall operating rate of spinning mills has dropped to about 50% (Punjab Province accounts for 70% of the country’s textile mills, and has 400 textile mills are facing closure). Therefore, when production capacity has dropped significantly and delivery dates are difficult to determine, suspending quotations for the Chinese market is also a helpless move for Pakistani yarn mills and exporters.
Third, the cotton yarn import demand of Chinese textile and garment enterprises continues to decline significantly. Coupled with the continuous depreciation of the RMB exchange rate, under the premise of a serious inversion with China’s domestic yarn, the export of cotton yarn to the Chinese market is under heavy pressure. Of course, there is another reason. The U.S./EU ban on Xinjiang cotton imports has been fully upgraded, and the impact has spilled over to Southeast Asian countries. Pakistan no longer dares to use Xinjiang yarn to produce textiles and garments for export, and can only use a large amount of domestic yarn. Therefore, the yarn mills have to take measures to “reduce exports”. , to meet domestic demand” measures.
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