Record wool season thanks to China

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The wool-selling season closed with the market indicators of both South Africa and Australia at record highs. The Cape Wools Merino Indicator closed at R211,99/kg (clean) – an increase  of 15,5% on the opening sale and 39% higher than last season’s closing sale (see graph 1). In Australia, the year-on-year improvement of the indicator was 34,8% (see graph 2).

This excellent performance of the market came amid increasing demand from within China for luxury goods, including high quality clothing. Fortunately for Merino producers many wool processing facilities in China are owned by overseas companies – Italian, German and Australian interests amongst them.

In addition, Merino wool has been positioned strongly as a premium and luxury fibre in China by many international and domestic brands. Many of them work with Woolmark and a major marketing aim is to position Merino wool as something to aspire to, to look and feel good, according to the June Market

Intelligence Report of Australian Wool Innovation (see p2 for more).

Cape Wools shipment figures for the period July 2017 to end March 2018 show that China now accounts for 71,5% of South African exports (calculated on a value basis) – an increase of almost 13% on the same period last season. There has, however, been a marked decline in wool exported to the Czech Republic, Egypt and India, the other major grease-wool importers, while Bulgaria has increased its imports substantially and now is the 5th largest importer of South African grease wool.

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