2022/23 seed cotton procurement and ginning progress in Xinjiang

Harvests of 2022/23 machine-picked seed cotton kick off in Sep, but affected by the epidemic, the procurement is generally delayed till Oct in North Xinjiang, and South Xinjiang is mainly picked for hand-picked seed cotton in Sep. After National Day holiday (Oct 1-7), with the on-going epidemic control measures, the procurement of machine-picked seed cotton may face further delay.

According to our survey, most ginners intend to purchase new seed cotton at around 5.5yuan/kg this year before National Day holiday, and due to the quality differences, some intend to purchase at a low level of 4.8yuan/kg. But growers cannot accept this level, and are tight sellers. Affected by the epidemic, the trans-regional seed cotton procurement and sales are impacted in short, and some growers choose to sell at local market, so price differences are large among regions in Xinjiang. Recently, the epidemic in Xinjiang results into the tight supply of spot cotton in inland, and prices remain high. Eyes are put on the new seed cotton procurement. The situation in Xinjiang is showed briefly below.

By Oct 12, 2022, inspected volumes of new cotton were 35,919 tons nationwide, including 31,285 tons in Xinjiang, while during the same period of last year, the volumes were 121,299 tons in Xinjiang, down 74.2% year on year. This year, ginning work is obviously slow, and the procurement work is also obviously impacted by the epidemic. Seed cotton prices have big differences in Xinjiang. We have made a brief survey on some ginners in Xinjiang about the procurement and ginning works.

Based on current survey, there are many uncertainties in 2022/23 season. Impacted by the epidemic, the notary-inspection, ginning process and transportation is delayed.

In addition to the influence of epidemic, the slow procurement of seed cotton this year is also affected by the price differences between ginners and growers.

This year, the machine-picked seed cotton prices have risen slowly from 5.1yuan/kg in Sep to 5.7uyan/kg, but obviously lower than the same period of last year.

After a significant loss last season, ginners in Xinjiang are cautious to purchase this year. The competition between ginners and growers on prices will be severe. It is understood that ginners intend to purchase machine-picked seed cotton at 5.5-6yuan/kg this year, much lower than the selling interest of growers. Therefore, cotton farmers are mostly unwilling to sell, and the purchasing volumes are limited.

After the National Day holiday, the epidemic situation in Xinjiang becomes severe and the liquidity is impacted. Besides, seed cotton prices differ much after the holiday, and there is no mainstream level.

After the holiday, hand-picked seed cotton prices have declined compared with Sep, while machine-picked seed cotton prices inch up. In addition to the competition between growers and ginners, higher spot cotton prices and tight supply in inland warehouses are also supportive to machine-picked seed cotton prices somewhat.

2021/22 Xinjiang machine-picked grade-3129 cotton is mainly offered at 16,100-16,450yuan/mt in inland warehouse, and 15,300-15,500yuan/mt in Xinjiang warehouse. Since Oct, 2022/23 spot cotton offers rise from 14,100-14,500yuan/mt to 14,900-15,000yuan/mt in Xinjiang warehouse due to tight supply.

Conclusion: the procurement progress of new seed cotton is obviously lower than the same period of last year, and the procurement, ginning progress and transportation is all impacted by the epidemic in Xinjiang. With limited arrivals and tight supply, machine-picked seed cotton prices rise somewhat currently. The game between ginners and cotton growers is still going on and later, eyes shall continue to be kept on the seed cotton procurement.