Cotton demand plummets during coronavirus pandemic

Retail sales for clothing and clothing accessories in March were down more than 50 percent from the same month last year, according to a U.S. Census Bureau report.

By Jessie Higgins
Demand for clothing, textiles and raw cotton has fallen sharply amid the coronavirus pandemic. Photo courtesy of Pixabay
Demand for clothing, textiles and raw cotton has fallen sharply amid the coronavirus pandemic. Photo courtesy of Pixabay

EVANSVILLE, Ind., April 16 (UPI) -- As countries worldwide take measures to slow the spread of coronavirus by quarantining people and closing nonessential businesses, sales of cotton -- and the clothing and textiles made from it -- have declined sharply.

Demand for cotton is so low that even though prices hit their lowest levels in more than a decade, retailers and manufacturing facilities around the world are cancelling orders.


"Every stage of the supply chain is getting hit," said Jon Devine, senior economist for Cotton Incorporated, a nonprofit industry organization based in North Carolina.

"Retailers are suffering," he said. "In between, you've got all the manufacturers that are trying to get their orders cancelled. And then you get all the way back to the field. Farmers are entering their planting time. They have some difficult decisions to make."

Retail sales for clothing and clothing accessories in March, many made with cotton, were down more than 50 percent compared with the same month last year, according to a U.S. Census Bureau report released Wednesday.


With roughly 95 percent of the cotton grown in the United States used for clothing and other textiles, such as towels and sheets, reduced sales have a significant impact on the cotton industry, Devine said.

Most of the manufacturing is performed in overseas facilities. And many of those facilities have closed to slow the spread of the virus, leaving exporters with nowhere to send their goods, Devine said.

Cotton prices, as a result, have fallen sharply. Cotton was trading around 52 cents a pound Wednesday, down from about 70 cents a pound at the start of the year -- roughly a 26 percent drop, according to the Chicago Mercantile Exchange.

That price is below the cost of production for most farmers, Devine said. That might prompt some farmers to plant a different crop, he said.

Most farmers have purchased their seed and the equipment for this year. And with roughly six months before the 2020 crop is harvested, a lot of time remains for prices to rebound, Devine said.

But that will only occur if cotton sales pick up. And there is no sign of that anytime soon.

"Usually, a drop in price makes people start looking for bargains," said Mark Bagby, a spokesman for Calcot Ltd., a cotton cooperative in Bakersfield, Calif., that markets and sells cotton for growers in California, Arizona, New Mexico and Texas.


"But that's just not happening. There's so much uncertainty. People are afraid to do anything."

According to the U.S. Department of Agriculture, the worldwide economic slowdown "with little precedent" will, this month, most likely produce one of the largest reductions in American cotton exports ever recorded.

"Consumption is lower for every major country, with total world consumption down 7.6 million bales or 6.4 percent from March," according to the USDA's monthly World Agricultural Supply and Demand Estimates released April 9.

"At 110.6 million bales, world consumption in 2019-20 is now projected to be 8.1 percent lower than in 2018-19. This would be one of the largest annual declines on record."

Meanwhile, overall stocks of stored cotton in the United States are hitting record highs. Concern is mounting that unless cotton starts moving again, sufficient storage for this fall's harvest will not be available.

"We can store about 60,000 bales in our warehouse," said Donna Lane, general manager for Decatur Gin Co. in Bainbridge, Ga. "We need to get our warehouse cleaned out before the new crop comes in this fall. Otherwise, we'll be in a mess. [We'll have] nowhere to put the new crop."

Lane said it's impossible to predict what the market will be like by then. That depends on how long quarantines last, how promptly factories reopen and how quickly consumers start to buy clothing again.


"People will still need to buy clothes. That's not going to change," Devine said. "But in the meantime, there could be a lot of economic hurt. A lot of companies may go out of business."

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