Why Cotton Demand Can Collapse While Apparel Sales Are Still Strong

Demand does not start with the consumer

When a t-shirt is sold, cotton is not consumed at that moment. It was purchased much earlier, when the mill placed its order.

The chain works as follows:
retail sale → inventory gap → wholesale order → mill coverage → cotton fixation

The market prices only the last step. By the time the consumer checks out, the cotton price has already moved on.

Consumer confidence is therefore the most lagged signal in the chain. Whether the index is high or low, that information reaches the mill weeks or months later. Strong retail sales often represent previously placed orders being delivered, not new demand being created.

The mirror reflects reality, but late. Ignoring this delay means reading where the market is believed to be, not where it actually is.

It is not the level, it is the direction

Most analysis asks whether demand is strong. The market asks whether demand is accelerating.

When sales rise and orders rise, prices move up.
When sales look strong but orders stall, prices can fall.
When sales decline but new orders begin, prices start to rise.

The most common mistake occurs in the second case. Data looks good but buyers are gone. Nobody announces it, and because the numbers still appear strong, few notice. Markets usually realize this far too late. The 8% growth figure may be masking exactly this situation.

Early demand is invisible demand

Tariff pressure and cost fears pushed importers to order ahead of schedule. This is not real consumption but demand borrowed from future months.

In October 2025, U.S. wholesale inventory-to-sales ratios fell to post-COVID lows. That may signal a restocking wave, yet its timing will be determined by capacity and raw material pricing, not consumer sentiment. Orders return because inventory runs out, not because consumers feel optimistic.

Markets therefore often weaken under strong data. Orders are already filled. Restocking does not begin because inventories remain full. Demand deterioration begins long before the data confirms it.

Why the news always arrives late

Macro data measures outcomes, not behavior. The gap is weeks, sometimes months. Behavior occurs in factories; data appears later in reports.

Prices react when mills finish buying. Sales data is released months afterward, followed by commentary and charts. Markets do not turn because data arrives. By the time data arrives, the turn has already occurred.

Coverage behavior reaches prices first and headlines later. Macro data summarizes well but rarely arrives in time for decisions.

The question that actually matters

“How much are consumers spending?” is misleading. Strong spending data is simply the record of purchases already made.

The real question is: when will buyers be forced back into the market? When will inventories run out? And where will cotton prices be at that moment?

Viewed this way, the 8% apparel growth looks different.

Prices wait for necessity, not demand. Mill coverage timing measures that.
If this changes how next week’s data is read, the piece has served its purpose.