Cotton is the main raw material of cellulose products (Sodium CMC, HPMC, MC, etc), so cotton production could influence prices of cellulose products. Let’s analyze the cotton price trend based on the forecast of 2021 cotton production by Cellulose Industry Association.
National Cotton Marketing made a survey for main cotton-growing regions and they estimate the output of cotton in 2021 is 5.68 million tons which drops by 4.8% compared with records of last 3 years:
- Xinjiang : in early September, cotton grows well as there are more days with higher temperature which can make up for the disadvantages caused by previous extreme weather. But there will be a delay in harvest time this year. Compared with last year, which is the year of highest production, output of 2021 will drop to around 5.149 million tons.
- Other regions: Cotton production drops sharply compared with last few years in Yellow River basin and Yangtze River basin.
Yellow River basin: Due to Hebei’s and Hunan’s severe rainstorm in July, cotton stalks get flattened which makes a 25.8% decline of output to 0.34 million tons.
Yangtze River basin: Average production per acre is higher since there are less days with wet weather while total production is less than last year. Estimated output will be around 0.149million tons, with a decline of 20.7%.
Based on above data, we can forecast that cotton production in 2021 has declined about 20% compared with 2020. Considering this, the cotton price will keep at a higher level before Q2-2022. Certainly, it also depends on the market demand.
Cotton is the necessary raw material for high viscosity Sodium CMC, like FH3000(FVH6-3), FH4000(FVH6-4), FH5000(FVH6-5) and FH6000(FVH6-6), etc. All the above types Sodium CMC can be provided by SINOCMC.
Data Source: China Cellulose Industry Association