Pakistan Fiber and Yarn Prices (Monthly)

Fall in Cotton Yarn Prices

Cotton yarn prices declined over the past four weeks in Pakistan, reflecting weak demand from downstream processors.

Lower cotton fiber prices continued to cap yarn prices, keeping them subdued in both domestic and export markets.

Trading activity in the Faisalabad yarn market remained sluggish.

A prolonged nationwide transport strike disrupted logistics and delayed shipments, further weighing on market activity.

Weaker International Market

On the export side, a sharp slowdown in shipments led to a broad decline in export yarn prices across all major categories.

Market participants reported limited new bookings from Chinese buyers at lower price levels, while some renewed interest was seen from Bangladesh.

Pakistan’s textile and clothing exports fell by 2% in value terms in November 2025, largely due to a sharp drop in unit values across key product categories.

Strong Rise in Apparel Export Volumes

In contrast, export volumes of knitwear, woven garments, home textiles, and towels increased significantly versus historical norms, indicating that weaker pricing, rather than volumes, was the main driver of the decline in export earnings.

At the same time, yarn import volumes surged, pointing to improving activity in downstream textile and apparel segments but low operating rates at domestic spinning mills.

Restoring Import Tariffs?

Removing cotton yarn from the duty-free import facility could provide some near-term relief for the local spinning industry.

While lower cotton fiber prices have partly offset the decline in export unit values, producers continue to face pressure from high energy costs, elevated financing expenses, and persistent domestic inflation.

Impact of IMF Program

Although the government has withdrawn the Export Development Surcharge (EDS) to support exporters, meaningful cost relief remains constrained by Pakistan’s commitments under the IMF program.

Monetary conditions eased modestly during the past week, as the central bank cut the benchmark policy rate to 10.5% from 11% and well below the earlier peak of 22%. Inflation has also moderated to around 6%.

Cotton fiber prices edged slightly higher over the past four weeks, with U.S. import offers rising to around 72.77 cents per pound.

Polyester staple fiber prices were broadly stable during the month despite declines in PTA and MEG prices in international markets. Gross margins at domestic polyester plants improved further, supported by relatively tighter domestic cotton availability.

Price Forecasting

Looking ahead, fiber and yarn markets are expected to remain under pressure amid weak downstream demand, ongoing price competition, and a strong domestic currency, keeping near-term sentiment cautious.