China's Textile Mill Industry is "Sick"

The CEO of Staple Cotton in Memphis, Hank Reichle, told members of the Louisiana Cotton and Grain Association during their annual meeting in Monroe, cotton consumption in this country increased over five percent lasts year compared to 2017

At the same time, China has reduced its cotton stocks by 5.7 million bales.

“So when you look at the balance sheet it looks like stocks are coming down so prices should be rising,” said Reichle. “Well, all of that is set to occur, according to statistics, in China. And I can tell you right now the sickest of all the textile markets out there is China. Not only because of the trade war but also just their economic situation is not great and that affects the global economy.”

Reichle put it more in perspective by doing some quick math.

“Mill usage in China is around 40 million bales which is one-third of global consumption. In other words, one out of every three bales that are opened up and run through a textile mill occurs in China. So when China gets stick, we all get sick as well.”