The premium for Australian cotton depends on the product category and what the customer is currently using. The key point for Supply Chain Managers and Buyers to remember is that a 5-10% premium for the raw material should most often be diluted down to a negligible premium once at garment or finished product stage.
It's all relative. If the customer is high end and using SJV or Pima they will be looking at a discount for Australian cotton. If they're a lower end spinner, they may pay anything from a 5-10% premium for the raw material when compared with standard American cotton, 10-20% compared to Brazilian for example.
Buyers need to investigate their cotton supply chains and try to find a supplier who can deliver what they require without margins being continually added as the cotton makes its way through the supply chain. Bigger brands have bigger buying power in this regard. Cotton Australia is working with many brands that have managed to source 100% Australian cotton into their products with little or no effect on the overall cost of the garment.
It's also important to remember that like everything, you get what you pay for. Australia's cotton growers produce very high quality crops with almost zero contamination, making their product very attractive to spinning mill customers. While switching to Australian cotton shouldn't make a huge difference to the overall cost of the garment, paying that little bit extra means you will get superior quality garments that we know consumers love to buy.
