High seed cotton prices and ginning costs in early 2018/19
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High seed cotton prices and ginning costs in early 2018/19

Views: 7     Author: Site Editor     Publish Time: 2018-09-14      Origin: Site

In Sep, new crop year has kicked off in China. By Sep 7, seed cotton has started to be harvested in most cotton growing areas of inland, and some new cotton has been transacted. In Turpan of Xinjiang, new seed cotton also starts to be picked and transacted. Modest quantity of new cotton has arrived on the market in Marabishi, Xinjiang, and seed cotton prices are obviously higher than last year.

Cotton planting and harvests in inland:
Cotton yield rises in some areas of inland this year, but the planting areas are estimated to be less compared to last year. It is heard that yield in Shandong is about 250kg per mu. In Hubei, ginning factories reflected that local planting areas are projected to reduce by nearly 20% compared to last year, while yield is estimated to rise slightly. In Cangzhou of Hebei, harvests are low in the areas damaged by bad weather, to be less than 100kg per mu on average. In Henan, cotton areas also move lower this year and some local ginners go to Xinjiang for business. In general, cotton areas in inland have been constantly decreasing in recent years and ginners turn to Xinjiang gradually.

Seed cotton:
By Sep 7, modest quantity of new seed cotton arrives on the market in East Xinjiang and South Xinjiang. Prices of seed cotton with ginning yield of 40% are at 7.3yuan/kg, but the reference value is limited due to small volumes. Turpan has new cotton as well, but the cotton is not good for spinning, mainly for wadding, so its reference value is also limited. In general, new cotton in Xinjiang is limited, and sales are ordinary. Most ginning factories in Xinjiang wait for the intensive arrivals of seed cotton.

In most cotton growing areas of inland, seed cotton has arrived on the market successively in Hebei, Shandong, Tianjin, Anhui, Henan and Hubei, and prices are much higher than last year, but different based on quality and regions.

regionsSeed cotton (yuan/kg)Ginning yield (%)cotton seed (yuan/kg)Traded prices (yuan/mt)
Hubei6.8-6.935-36.52-2.1above 16000


Compared with the prices in 2017, seed cotton prices in inland are higher about 0.60yuan/kg this year in general, which is mainly owing to higher planting costs this year.

The ginning yield also differs obviously in different regions. The highest ginning yield is in Tianjin, and the proportion of seed cotton with ginning yield of 40% and above is relatively high, and prices are also high. Ginning yield in Hubei is relatively low, below 37%. Shandong province sees large differences. Gansu has no new cotton on the market, but the prices can refer to the prices of Xinjiang cotton.

Cotton seed:
After seed cotton is ginned by ginning factories, the cotton seed is usually sold to cottonseed oil plants, and the cotton lint enters refined cotton plants and the seeds are processed to have cottonseed oil. In 2018, demand for cotton seed remains lackluster and prices have no big change compared to last year. Cotton seed prices may be at 2-3yuan/kg this year, averaged at 2.1yuan/kg. Cotton seed prices are still at low level, so on theory, ginning factories may face higher cotton costs this year. 

New cotton has been sold gradually in inland, but prices are high due to higher costs. In Shandong, prices of grade-3 cotton, white color, with 1.1% trash and 7% moisture regain, are at 16,200yuan/mt, and sales are ordinary. In Hebei, selling prices of new cotton approach 15,800-16,000yuan/mt, and lower at 15,800-15,900yuan/mt with inferior quality. In Hubei, selling prices reach above 16,000yuan/mt and it is heard that quality is better compared to last year. New cotton from Tianjin is sold at 16,100-16,200yuan/mt. Quality of cotton in Henan is oridinary and prices are at 15,800-16,000yuan/mt. In general, ginning costs to lint are above 15,600yuan/mt generally, gross weight, and some higher to 16,000yuan/mt, so selling prices are mostly above 16,000yuan/mt.

Currently, profits for ginning factories are limited. Due to thin profits and even losses, some ginners choose to stand on the sidelines first. Besides, some mills turn to purchase reserved cotton instead of new cotton due to high prices.

With the pressure from Xinjiang and limited profits, cotton areas in inland are expected to keep down this year. In Xinjiang, small quantity of new cotton arrives on the market, but the reference value is limited. In inland, seed cotton starts to arrive on the market successively, but prices are high. Later, seed cotton prices may move lower somewhat, but the decrement is limited as costs are high this year. Therefore, new cotton prices may keep at high level this year.