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Insight | Time: Sep 29 2018 10:01AM
Cotton linter market forecast in 2018/19 crop year
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New cottonseed started to arrive sporadically in Shandong, Hebei and Anhui since the end of Aug. In the beginning of Sep, new linters started to arrive sporadically in Chinese inland. Till now, the arrival of cottonseed in Chinese inland and Xinjiang has gradually increased and new linters start to be sold. What about the latest sales and tendency in the new crop year?

Farmers witnesses cotton harvest for consecutive years with the implementation of cotton reserve/auction policy, especially steady progress of cotton planting subsidy. Cottonseed production keeps high accordingly, exceeding 8.2 million tons in 2,017/18 crop year and likely to be more than 8 million tons for 2018/19 crop year.

The price of cottonseed is lower than that of cotton dreg and cottonseed applied in feedstuff has increased substantially in recent years, but the proportion in cottonseed production maintains small. The delinting ratio of the remaining cottonseed is mainly steady, except for some losses. Therefore, cottonseed output keeps increasing as well as cotton linter output, which is expected to be around 750kt in 2018/19 crop year.

Many cotton linter pulp mills and refined cotton plants especially the ones located in Hebei, Shandong and Jiangsu cut or suspend production due to intense pressure of environmental protection and influence of industrial cycle. Moreover, cotton linter pulp was replaced by wood pulp and cotton linter was partially substituted by artificial linter, so cotton linter pulp and refined cotton production reduced sharply. Cotton linter output was increasing in recent years while demand failed to improve, so the general supply turned to be loose and prices had been dreary. If Chinese government is still strict about environmental protection in the new crop year, cotton linter demand is hard to improve much and price is not expected to volatile much.
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