Will cotton linter get further boost?

Cottonseed price kept firm amid short availability and cotton linter price was also bolstered in Jun. It was the transition period of cottonseed supply in the later period of 2020/21 crop year, so the supply was tight and the price kept rising to hit new highs. However, cottonseed oil plants showed less enthusiasm for high-priced cottonseed and more of them stopped procurement to wait and see. Trades were thin accordingly and the price of cottonseed was talked down by cottonseed oil plants, but the decline was limited. As of the end of Jun, cottonseed price in Shandong and Hebei was generally around 3,600yuan/mt.

After the Dragon Boat Festival in mid Jun, cottonseed oil plants resumed operation slowly and cotton linter supply was also short, so the price was pushed up. Although the import had been increasing this year, the supply was still tight. According to customs data, China totally imported 81.937kt of cotton linter in the first five months of 2021, greatly up 123.16% on yearly basis. The import in Apr this year even hit new highs since Jun 2016. The increment was attributed by tighter dissolving pulp supply of China and huge price gap between Chinese and imported cotton linter this year. The import originated from India and Turkey was much favored by Chinese customers. Adding Brazil, the import of cotton linter from those three origins occupied for majority of total imports.

Despite minor decline around the end of Jun, cotton linter price is still expected to keep firm instead of sharp decline before the arrival of new linters after Sep.