Cotton linter price sheds after hiking

Seed cotton procurement is coming to an end and most companies start processing, so the supply of cottonseed has increased with prices falling from high level. Cotton linter prices also drop rapidly after hiking.

Almost 80% of seed cotton has been procured in Xinjiang and the price has inched down, with low-quality goods below 10yuan/kg and high-quality ones around 10-10.2yuan/kg. Cottonseed supply increases with more processing volume of ginners and coupled with falling transportation cost from Xinjiang to other provinces at the end of Oct, cottonseed price has dropped from high level. Now Shandong and Hebei-origin cottonseed is around 3,300-3,400yuan/mt and Xinjiang-origin one has fallen from 3,300-3,400yuan/mt to 3,050-3,200yuan/mt.

Seed cotton has been procured slowly since the arrival of new cotton in Sep, so the supply of cottonseed and cotton linter had been short and producers became reluctant sellers, with prices rising significantly since the end of Sep. After the National Day holiday, more Xinjiang-based ginners have stopped procuring high-priced seed cotton and coupled with enhancing regulation policies, seed cotton procurement price has been falling rapidly since Oct 9. Cotton growers become active sellers and seed cotton procurement has sped up. The supply of cottonseed has been increasing since the end of Oct and prices are gradually weakening, so cotton linter price has also dropped after hiking. In Xinjiang, cotton linter for food-grade refined cotton has fallen to 9,000yuan/mt from 10,000-10,200yuan/mt.

Cotton linter price had been soaring since the National Day holiday and it hit a decade high by exceeding 10,000yuan/mt in late Oct. However, the supply has been increasing with rising operating rates of cottonseed oil and delinting plants, then the price declines rapidly with weakening bullish expectation.