KARACHI, Dec 16: Physical activity on the cotton market slightly slowed down on Monday as spinners curtailed their daily offtake followed by reports of liquidity problems.

But some of the leading spinners indulged in forward trading and offered to buy fine lots from the Sindh ginneries at much higher rates on the perception that the late delivery could give them the breathing space, dealers said.

According to spinners the foreign offtake of cotton yarn under the current contracts are almost complete but fresh deals for the next quarter ending March 31, 2003 are still to be signed.

The ready offtake from the local end-product users is also on the lower side owing to year-end closing and the combined of the both has increased their unsold stocks.

“Huge amounts are tied to unsold stocks of cotton yarn and cotton stocks, which in turn has limited our daily market operations at least for the near-term”, one spinner claim.

As the forward deals suit both the spinners and the ginners, leading among them have made arrangements to indulge in forward trading, the delivery being fixed at the mutually suitable dates, he adds.

But local brokers fears forward deals generally create more than one settlement problems if prices rise and fall sharply in between and leave behind a long list of defaulters on both ends of the forward trading.

However, as the arrangements suit to both the buyers and the sellers in most of the cases they work during some crisis-like trading conditions, they added.

Meanwhile, the local Textile Commissioner’s office has released the official consumption figures for the organized textile sector for the year ended Aug 31, 2002 at 10.529m bales. Together with the intake of the unorgnized sector, the total amounted to 1.3m bales, according to market sources.

On the export front, private sector exporters have registered export sales contracts for another 700 bales, on Dec 14, with the Export Promotion Bureau, the total foreign sales so far being 50,064 bales since Sept 1, 2002.

Official spot rates were raised further by Rs10 to Rs2,100 per maund but in the ready section fine lots were sold above them.

Ready offtake was relatively slow amounting to about 15,000 bales, all from the Sindh ginneries: 400 bales, Dadu at Rs2,090, 500 bales, Kot Diji at Rs2,065, 400 bales, Khairpur at Rs2,090, 1,000 bales, Setharja at Rs2,115, 1,000 bales, Mehrabpur at Rs2,125 and 5,000 bales, upper Sindh at Rs2,150.