US department of agriculture (USDA) estimates world cotton mill use to plunge nearly 15 per cent year-on-year in marketing year 2019. Cotton mill use generally follows global economic activity. When the world economy weakens— as during the COVID-19 pandemic—consumers often defer purchases of items such as clothing, and the associated industries adjust their operations accordingly. For the textile and apparel industry, these adjustments have included temporary closures or substantial reductions in manufacturing operations as postponement or cancellation of orders have had ripple effects throughout the entire supply chain, from raw fiber procurement to retail sales, said the Economic Research Service of the USDA in its 'Cotton and Wool Outlook' report for June 2020.
COVID-19 and developing global economic slowdown has significantly reduced recent USDA monthly forecasts for world cotton demand for marketing year ’19. Based on USDA’s June 2020 forecast, marketing year 2019 global cotton mill use is estimated at a 16-year low.
Global cotton mill use has declined by over 5 per cent year-over-year in only 10 other years since MY 1920, with most of those reductions associated with global recessions, including the Great Depression. More recently, uncertainty surrounding the global financial crisis significantly limited world cotton demand in marketing year 2008, while a dramatic run-up in marketing year 2010 cotton prices to levels not experienced since the US Civil War hampered mill use in marketing year 2011.