Industry Observation: Global Textile And Clothing Consumption Continues To Decline, And The Cotton Market Continues To Shrink

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The retail sales of clothing in the United States had a negative growth for two consecutive months, and the inventory level of wholesalers remained high. As the financial environment continues to tighten and inflation continues, American consumption has gradually fallen after a brief increase at the beginning of this year. According to the data of the U.S. Department of Commerce, the retail sales of clothing (including shoes) in the United States reached $25.89 billion in March 2023, down 1.7% month on month and 1.8% year on year, showing negative growth for two consecutive months. In March 2023, the clothing inventory of American wholesalers remained at a high level of $40.455 billion, down 0.4% month on month and up 17.9% year on year, indicating that American clothing is still in the de stocking stage. GAP, one of the largest apparel retailers in the United States, said on April 27 that it would implement a restructuring plan, including about 1800 layoffs.

Southeast Asia textile market demand continued to decline. India's textile and clothing exports and domestic consumer demand continued to shrink. Traders in the Delhi market reflected that there was no signal of improvement in the current downstream demand, and enterprises were forced to reduce cotton yarn prices. Traders in Ludhiana market said that some enterprises had to take an extra day off every week to reduce production. Vietnam's exports in the first quarter fell 11.9% year on year, with 42900 enterprises closed, up 20.1% year on year. This decline did not reverse in April. The latest data from the National Bureau of Statistics of Vietnam showed that Vietnam's exports fell 17.1% year-on-year in April.

In 2022, the export of American cotton improved, and in 2023, the planting of American cotton was steadily promoted. As of the week of May 4, 2023, the net contracted volume of American cotton exports has increased for three consecutive weeks, all of which remain at around 50000 tons; In 2022, the cumulative net contracted export volume of American cotton was 1.7917 million tons, a year-on-year decrease of 33.5%, and the cumulative decrease was 5.6 percentage points lower than that of the previous month. By May 7, 2023, the sowing progress of American cotton in 2023 had increased by 7 percentage points over the previous week, decreased by 1 percentage point over the same period of the previous year, and decreased by 1 percentage point over the average value of the past five years.

Indian cotton output will be further reduced in 2022 and will increase in 2023. The Indian Cotton Institute (CAI) continued to reduce India's cotton output in 2022. The latest report of the agency shows that India's cotton output in 2022 will be 5.07 million tons, 80000 tons less than that predicted last month. Indian cotton planting is about to start in 2023. Based on the expectation of normal monsoon season, the forecast of Indian new cotton production in 2023 may be higher than this year.

Brazilian cotton spot exports continued to decline, and Australian cotton picking reached a peak in 2022. Affected by the sluggish consumption of the international cotton market, Brazil's cotton export in April 2023 was about 61000 tons, a year-on-year decrease of 19.5% and 55.1% respectively. The Australian Cotton Company said that most of the cotton growing areas in this year have favorable planting conditions. It is estimated that the Australian cotton output will be about 1.18 million tons in 2022, and the cotton quality indicators will also be significantly improved.

According to the data forecast of the US Department of Agriculture in May, the global cotton output in 2022 will be 25.33 million tons, up 0.50% year on year, the highest level in nearly three years; The consumption was 23.87 million tons, down 5.41% year on year, the lowest level since 2013 (excluding 2019 when the epidemic just broke out); In 2022, the global cotton output will exceed the demand by 1.46 million tons. In May, the US Department of Agriculture first released the forecast of global cotton production, sales and stock in 2023: the global cotton output in 2023 will be 25.19 million tons, down 0.57% year on year; The global cotton consumption was 25.31 million tons, up 6.02% year on year, and the gap between production and demand was 120000 tons.