Steep decline of cotton linter import amid contradiction between

Cotton linter price of China has declined sharply with decreasing demand this year, which is affected by several factors both at home and abroad. The import market is also cooling down as the volume in Jul has fallen to new lows within the year.

Due to the influence of several factors, cotton linter price of China has declined steeply when the demand is reducing. The import of cotton linter has also dived. According to customs data, cotton linter import of Chinese mainland is 4.913kt in Jul, a month-on-month decrease of 35.2% and a year-on-year decrease of 79.8%.

In the first seven months of 2022, China imports 74.3kt of cotton linter, down 40.5% on yearly basis. However, it has exceeded the total volume of 2018 or 2020 and close to the whole-year level of 2019.

The import price in Jul is relatively high at $591/mt, up 3.7% month on month and up 57.8% year on year, which is equivalent to around 4,550yuan/mt. It is lower than the average price of Chinese cotton linter for industry-grade at 5,514yuan/mt, but is higher than the current level of 4,000-4,100yuan/mt in China.

The destinations of imported cotton linter has been further concentrated. In Jul, Shandong and Anhui tank the top two places with total share of around 85%. Among them, Shandong takes up more than half of the share.

It is similar in the origins. In Jul, Brazil, Turkey and Turkmenistan continue to rank the top three places with total percentage of 73% and Brazil occupies around 39% of total imports. However, the import form India has declined significantly this year as the percentage has been less than 10% for consecutive two months from Jun to Jul.

In addition, the import of Xinjiang has increased significantly compared with the same period of 2021 and the import from Central Asia also improves much this year. However, the oversupply of cotton linter market has gradually emerged and considering the arrival of new cottonseed and cotton linter after Sep, the market is covered with stronger wait-and-see stance.