Higher concentration but less import of cotton linter in the first half

Cotton linter market has experienced twists and turns in the first half of 2022 due to the influence of various factors. Although the import volume in the first half of the year failed to sustain the "blowout" growth of 2021, there has been no "cliff-like" decline like cotton price till now.

Cotton linter market opened the year with a good start, but under the influence of several factors such as geopolitical conflicts, aggressive interest rate hikes by the Fed and ban on Xinjiang goods, the prices gradually dropped, coupled with big ups and downs. According to customs data, cotton linter import of Chinese mainland in Jun was about 7.578kt, down 54.2% month-on-month and down 59.5% year-on-year. In the first half of this year, the import amounted to 69.373kt, down 31.1% year on year. However, it had exceeded the whole-year import of 2018 and close to that of 2020.

In Jun, the import price was $570/mt, up 0.33% m-o-m and up 62.5% y-o-y, which was relatively high around 4,350yuan/mt in RMB terms. The average price of cotton linter for industry-grade refined cotton was 6,671yuan/mt in Jun, which was much higher than that of import price in the same month.

In the first half of 2022, the import price averaged at $552/mt, up 70.3% y-o-y, which was equivalent to around 4,220yuan/mt in RMB terms. The price of cotton linter for industry-grade refined cotton in China was around 6,815yuan/mt, which was still higher than import price.

There was higher concentration for destinations of imported cotton linter in Jun. Shandong, Anhui and Jiangsu ranked the top three places with higher percentage of almost 91% and Shandong occupied around 55% of total share. In the first half of year, the three provinces accounted for almost 71% of total imports.

As for origins of cotton linter, Brazil, Turkey and Turkmenistan took up 85% of total volume in Jun, especially Brazil whose share was as high as about 41%. In the first half of 2022, the import from those three countries occupied 64% of total volume.

To sum up, cotton linter import price was relatively high in Jun, but the import volume in the first half of year had dropped much compared with the same period of 2021. The concentration of origins and destinations improved significantly as the import from Central Asia and to Xinjiang province increased substantially.