Retail Struggles Point to Cotton Supply Glut, Stalling Rally
- Demand slide lifts inventory outlook to 2nd-highest in decades
- China retail sales decline more than forecast in May
Photographer: Ty Wright/Bloomberg
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Cotton growers are facing a growing supply glut as shoppers are slow to return to stores, threatening to halt a recovery in prices from a decade low.
Companies such Hennes & Mauritz AB are struggling to regain pre-virus sales levels and the owner of Men’s Wearhouse and Jos. A. Bank is mulling bankruptcy protection. China’s retail sales in May fell more than analysts forecast, illustrating the challenge of getting shoppers back to stores as economies reopen. The U.S. Department of Agriculture last week cut its 2020-2021 world consumption forecast by 1.8%, and raised its estimate for August 2021 global reserves to the second-highest since at least 1960.