Can the weakness of cotton linter be reversed in the short run?

Cottonseed price kept rising in early Jun during the transition period of supply. Moreover, cottonseed oil remained strong with prices hitting new highs, spurring further increase of cottonseed. In mid-to-late-Jun, bulk commodities had been shedding constantly since the Feb raised the interest rate, the market demand was lackluster and US was ready to implement ban on Xinjiang goods. The price of cotton and cottonseed oil dived accordingly and cottonseed market also weakened rapidly.

Cotton linter was underpinned by cost in early Jun and producers were eager to quote firmly, but the demand was still dreary and coupled with the influence of Xinjiang cotton issue, the price was moving down. In late Jun, China cotton market was covered with pessimism due to several factors like oversupply but less demand and macro economy as ZCE cotton futures plunged last Friday. Therefore, cotton by-product market was covered with increasing wait-and-see stance with prices generally falling, so cotton linter market is also expected to remain weak in the short term.

However, the import market continues to perform well. The import volume of cotton linter is generally high this year when there is huge price gap between Chinese and imported goods and the Xinjiang cotton issue also spurs the increase of cotton linter import.