Cost of Cotton
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The graph below is the cost of raw cotton is US Cents per Kilo, at some point this price increase will have to move through to retail prices. As yet, I have only had the odd mutter from Japan, but nothing concrete, however I am sure we are in for some upward movements in wholesale and thus retail costs for all things cotton.
G
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time to buy a size run of 634s's and wait for them to reach $1000.00 each. ::) profits much? jk. but wow… thats pretty steep!
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I'd be curious to see how much cotton represents in the overall cost of a pair relative to labor and other costs.
The hockey stick in the chart is evidently the sure sign of a bubble and I'd put money on the table that it'll come back to earth in a not too distant future.
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I'd be curious to see how much cotton represents in the overall cost of a pair relative to labor and other costs.
The hockey stick in the chart is evidently the sure sign of a bubble and I'd put money on the table that it'll come back to earth in a not too distant future.
The actual cotton cost is not a lot but the mark up of it though every step really ads up the process of getting it wash and treated, spun then to textile. Although I can't speak for IH but for me the fabric alone stands for 40-50% of the cost in a garment. It translated to a rise of 10-15% in retail.
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In the last 9 months my company had to adjust the fabric purchasing prices twice - each time by roughly 8% on average. Cotton fabrics went up by more than 20% altogether. Looking at the fibers only: cotton fiber and yarns went up by 40% and more in some places (we source globally). And that is just for plain commercial fibers and fabrics - for higher value fabrics like US Cotton I'm wouldn't be surprised if it is actually worse.
Our sewing thread supplier did raise the prices by globally 8-9% as well - we haven't seen that in years…
Similar to Jimmy we see the fabric cost representing 30-50% of the FOB. On the retail price this is less, but this is dependent of the nature of the business (retail or wholesale) and sheer size of it.
Most global apparel businesses will raise their retail prices (more if the handle mostly natural fibers) this year if it hasn't happened already.
I would expect the jeans prices to go up this year as well and from a bill-of-material point-of-view this is justified. How much is the question...
