The Market Is Feeling The Decline In Textile And Clothing Exports

Recent textile and clothing trade data show the global impact of the epidemic and signs of recovery in the industry.

Consumer demand is affected in many ways - changes in behavior, blockade restrictions and rapid unemployment reduce disposable income. Global apparel imports fell sharply in April and may, with the U.S. imports falling 55% in May compared with the same period last year. Imports from the European Union and the United Kingdom fell by more than 40% over the same period, while those of Japan fell by 30%.

The decline in textile and clothing exports was felt in all major markets, but not the same. Exports from Bangladesh and India fell by 85% and 90%, respectively, while those of Pakistan, Turkey and the European Union fell by 60%. Vietnam's textile and clothing exports fell by about 30%.

In previous economic slowdowns, such as the "Great Recession" of 2008, the sudden drop in consumer demand initially did not match the slowdown in cotton spinning related processing industries (i.e., spinning, knitting, weaving and tailoring).

This leads to a large increase in inventory throughout the supply chain. As consumer demand recovers, excess inventory is slowly digested.

However, the impact of new coronal pneumonia on demand and supply is synchronous. The blockade has slowed consumer spending and stopped cotton related processing. In India, Pakistan and the United States, spinning mill operating rates fell by more than 90%, while the decline in China was slightly lower. Similar to export data, Vietnam's operating rate fell only 30%.

The recovery of the spinning industry is also uneven. The new epidemic first hit China, which coincides with the Spring Festival holiday. China's recovery rate is faster than that of many countries. After three to four months, the operating rate returned to the pre epidemic level, and six months later, the operating rate of other countries was still lower than that before the epidemic. Although the rapid closure of spinning mills has limited the increase of yarn and fabric stocks to some extent, cotton stocks have expanded rapidly.

When the new crown outbreak occurs, most of the crops in 2019 / 20 have been harvested, and this year's planting has begun. Global production forecasts for 2020 / 21 have fallen only slightly since February, but global consumption is a different story. Comparing global consumption in November with the USDA's February forecast, consumption is estimated to decrease by 17 million bales (14%) in 2019 / 20 and 7 million bales (6%) in 2020 / 21. As a result, global cotton stocks in 2020 / 21 are expected to be 22 million bales (22%) higher than the Outlook Forum.

The rate of recovery in consumer demand is uncertain. Recent clothing imports include delayed demand due to consumer purchases of goods that were initially delayed. In addition, some of the lost needs, such as school uniforms, summer and holiday clothing in 2020, cotton sheets and towels used in hotels, and other seasonal clothing, may never recover. The long-term impact of telecommuting on clothing purchases in the workplace and in schools is unclear.