Highlight-reel moment for cotton linter market

Cotton linter market witnesses highlight moments this year as the price has gained significant increase. According the latest offers, the price has been getting close to 8,000yuan/mt for the first time in the past decade, although there is still a huge gap versus the bullish market in 2010.

The price trend of cotton linter in 2016 is similar with that of 2010, but there are obvious differences. In 2010, cotton linter for industry-grade refined cotton rose by 94% from 7,900yuan/mt at the beginning of the year to 15,300yuan/mt in mid-Nov. In 2016, the price gained ground by 81% from 3,800-3,900yuan/mt in late Jan to 6,900-7,000yuan/mt in late Nov. In 2021, the price has increased by almost 100% from 3,750-3,800yuan/mt to 7,550yuan/mt at present. It can be seen that the price gains big increase without short period this year.

The soaring price of cotton linter this year is contributed by loose monetary policy, new demand growth, logical relationship changes, seasonality as well as the nature of agricultural products. Now cotton linter for food-grade refined cotton has reached 7,200-7,300yuan/mt in Xinjiang, but 7,800-7,900yuan/mt outside Xinjiang, with the higher exceeding 8,000yuan/mt. Although the price is still half of the peak in 2010 (15,500-16,000yuan/mt in Nov 2010), it has been the peak in the past decade (since Jun 2011).

New cottonseed will arrive more than one month later and the price remains high during the transition period of supply. Cottonseed oil plants have gradually suspended operation and the operating rate is generally low, then less cotton linter is produced and these is hardly supply in most areas of Shandong, Hebei, Anhui and south Xinjiang, so the price will remain high in the short run.