Can cotton linter be pushed up by stronger cottonseed oil?

Prices of energy and chemicals have soared due to the Ukraine-Russia conflict and geopolitics and there is strong momentum of palm oil, soybean oil and soybean meal, so cottonseed oil and cotton dreg market is covered with bullish sentiment with cottonseed price going up.

The oil and gas export of Russia is interrupted by the Ukraine-Russia tensions recently, leading to wider supply gap of crude oil and pushing up the price rapidly. Coupled with the interruption of agricultural products caused by the conflicts between the two countries, palm oil and soybean oil prices have been rising constantly. Cottonseed oil and cotton dreg prices are soaring accordingly as cottonseed oil in Shandong and Hebei is mainly offered at 10,500-11,000yuan/mt at present, rising by almost 1,500yuan/mt after the Chinese Lunar New Year.

Cottonseed market is covered with bullish sentiment amid continued rise in cottonseed oil and cotton dreg, so the price is going up. Now Shandong and Hebei-origin cottonseed is at 3,500-3,600yuan/mt and Xinjiang-origin one has risen to 4,000-4,050yuan/mt, ex-works. Cotton linter suppliers supported by cost are eager to quote firmly, but prices are temporarily stable due to flat demand recently.

In conclusion, oil price hikes with strong momentum as Russian crude oil export is influenced by the Ukraine-Russia tensions and cottonseed oil is more likely to increase further in the short term. However, due to the complex situation between Russia and Ukraine, there are more emotional reactions and risk premiums, there is still greater uncertainty in the influence and the price volatility will be increasing.