Can cotton linter market keep firm before new cotton season starts?

Cottonseed price was moving upward in May. The supply was tightening in the later period of 2020/21 crop year, so producers became reluctant sellers at low prices. Many sources were still held by traders and cottonseed oil plants mainly purchased Xinjiang-origin cottonseed, making the price be firm and easier to rise than to drop. Coupled with continued increase of soybean oil, palm oil and soybean meal futures, cottonseed oil plants became more active in cottonseed procurement.

Just as mentioned above, cottonseed supply was tightening and less cotton linter was produced, while there was increment of demand from cotton linter pulp mills, so more cotton linter were imported in the recent months, especially notable growth in Mar and Apr. China imported 25.995kt of cotton linter in Apr, up 53% m-o-m and up 182% y-o-y. India was still the major origin as the volume accounted for more than 40% of total imports.

It is still the later period of 2020/21 crop year when cottonseed sources are limited and cotton linter supply is also tight in Chinese market, so the import volume is expected to be large before the new cotton season starts in Aug. The price of cotton linter is predicted to keep firm during Jun-Jul and may not decline much.