How will cotton linter perform when cottonseed prices keep sliding?

New cottonseed has been increasingly arriving since the end of Sep and the price is under downward pressure especially after the arrival of machine-picked cottonseed in North Xinjiang. Cotton linter has not arrived on large quantity and prices are mainly stable.

Cottonseed prices generally decline around the National Day holiday with increasing arrival of new resources, especially that of machine-picked ones in North Xinjiang. At present, Shandong, Hebei and Xinjiang-based cottonseed oil and delinting plants are cautious about procurement with wait-and-see stance. Machine-picked seed cotton with ginning yield of 40% is now procured at 5.3-5.9yuan/kg in Xinjiang, with the higher at 6.2yuan/kg. Hand-picked seed cotton is procured at 6.6-7.1yuan/kg, with the higher around 7.2yuan/kg. In Xinjiang, machine-picked cottonseed is around 2,900yuan/mt and hand-picked one is around 3,100yuan/mt. In Shandong, Hebei and Hubei, cottonseed price has fallen by 200-300yuan/mt to 3,800-3,900yuan/mt.

Seed cotton is arriving slowly this year and there is less procurement by ginners since cotton grower become reluctant sellers and there is impact of the COVID-19. Cottonseed price has fallen after the National Day holiday, but still hovering at high level in general. Cottonseed delivered to Shandong, Hebei and Xinjiang-based cottonseed oil and delinting plants is limited, so the volume of new cotton linter is not large. Moreover, cotton linter is difficult to be transported outside Xinjiang due to the COVID-19 epidemic, so prices are mainly stable after the holiday and offers are partially increasing. Now cotton linter for industry-grade and food-grade refined cotton is respectively at 4,100-4,200yuan/mt and 4,400yuan/mt outside Xinjiang.

Cottonseed will be intensively traded on large quantity during Nov-Dec and the price will still be under downward pressure. As for cotton linter, the price will be temporarily stable when Xinjiang-origin resources encounter difficulty in transportation due to the influence of epidemic.