China's cotton linter import market was outstanding in 2021, and the import volume was tolerable in the first half of 2022, but dropped significantly in the second half of the year.

 

Cotton linter demand of China was lackluster in 2022 due to several factors. The import volume continued to fall, especially in the second half of the year. In Nov, the import dropped to a new low since 2009, but warmed up in Dec. According to customs data, cotton linter import of China was 1.631kt in Dec 2022, up 36.6% m-o-m but down 88.2% y-o-y. The annual average import volume was 7.497kt in 2022, slightly higher than that in 2019.

 

The import retreated again in 2022 after witnessing a blow-out growth in 2021 as the total volume was around 90kt, down 54% y-o-y. The import in the first and second half of 2022 was respectively 69.4kt and 20.6kt.

 

Affected by the changes in origins of imported cotton linter and the diving price in China, the import price in Oct 2022 dropped significantly and hit new lows of $426/mt within the year, but gradually climbed up afterwards. In Dec, the import price was at $512/mt, up 3.5% m-o-m but down 5.3% y-o-y.

 

The annual import price was at $557/mt in 2022, up 45.17% y-o-y and staying at a high level in the past five years. It was mainly because that huge import in 2021 and the first half of 2022 led to tighter supply in overseas market, boosting the import price before Sep. Although the price declined after Oct, the annual average price was not low.

 

In terms of destinations, the import in Dec was mainly contributed by Jiangsu and Anhui. In 2022, Shandong, Anhui and Jiangsu ranked the top three places by taking up more than 75% of total import.

 

As for origins, the import from Tanzania and Brazil in Dec respectively occupied 48% and 47% of the total. In 2022, Turkey ranked the top place by importing 25.56kt of cotton linter to China, accounting for 28.4% of the total, which was followed by Brazil and Turkmenistan. The import form the top five origins took up as high as 87% of the total.

 

To sum up, cotton linter demand of China shrank in 2022 with the import volume falling by more than 50%, but the import price was at a high level in the recent five years. In 2023, the import market may be recovering, but there may be still challenges.