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ARTICLES >> Livestock Articles

Wool Meets the Market

Posted by Bestprac on Nov 04 2013

By Katie Fisher from Agrihort Communications

Meeting the growing trend of a casually-dressed society, the demands of emerging consumer markets in China and the long-time absent market in Russia are the key objectives for wool marketing in Australia this year.

Both industry analysts and producers are looking towards the, once manufacturing-only, Chinese market to provide the consumer backbone for the Australian wool market, as the former powerhouse markets of the United States and European Union wade their way out of economic mire.

But one of the sleeping giants is the Russian consumer market as it looks set to begin opening up for the Australian machine washable wool, lightwear wovens, and next-to-skin products. This innovation and technology was not available when Russia last entered the buying market some 30-odd years ago.

James Robertson sees growth in the wool markets.For South Australian wool grower and 2011 Nuffield Scholar, James Robertson identifying what the market drivers and trends are, is as important as producing a good clean clip which meets consumer demand for woollen products.

Heading the family-based company Robertson Chowilla, James operates four contiguous properties, totalling 126,000 hectares in South Australia and New South Wales, north of the River Murray between Renmark and Wentworth. In total, James is running 12,000 adult Merinos, joining 7000-8000 ewes per annum, and producing 400-500 bales of wool with an average 21 micron (weaners run about 19 micron and older ewes about 23).

The operation has been moving towards a much plainer sheep with bare points, free-growing, white, long stapled, well defined wool, using Kelvale (SA) and Keri Keri (NSW) bloodlines.

James Robertson“It seems that wool has become fashionable again, particularly with new technologies allowing wool to be used in next-to-skin garments and sports garments,” James explained.

“Brands like Ice Breaker in New Zealand, I/O Merino and Emu in Australia are pioneering the way for a younger generation to cast-off the myth that wool is ‘un-cool’ and ‘prickly’.

“Clearly the more fashionable or trendy lightweight activewear market is one that is expanding at present. Emerging wool treatment technology is allowing a broader range of wools to be used in next to skin and casual wear.”

It is a sentiment echoed by Australian Wool Innovation Senior Analyst, Market Intelligence and Reporting, Allan Wang.

Allan explained how today’s market trends were away from the traditional woven products using high-value fine wool fleeces of 16, 17 and 18 micron, to the more casual knitwear products which used the broader wools of 19 to 22 micron, and notably the cheaper, shorter-length wools.

He added that the trend of ‘casualisation’ of the consumer market had been noticed since before the Global Financial Crisis (GFC) when “everyone had enough money for a new suit”.

“Now, post GFC, the job market is not as stable and there is uncertainty in it, and that has led to a ‘delay’ in the suit market where people are delaying buying a pure wool suit.”

However, Allan said that: “There remains a fundamental demand for suits but even in the core suit buying market, such as the business sector, there has been a massive trend towards casualisation which has led people to buy less woven products and more knitted products like jumpers.”

That trend has to some extent taken the premium gloss off fine wool clips in the 16-18 micron sector, he added.

Countering the premium drop is the reduced flooding of the fine wool market, now that the Newcastle wool sale is no longer operational. He added that another factor has been AWI’s ability to now market the high quality and next-to-skin wool fabrics to the ‘Mothers and Babies’ market – a market which has previously rarely used wool in the key northern hemisphere markets.

“The biggest market drivers will come in 2014 from a number of sources,” Allan said, “as China sets its future direction and the US and EU markets begin their slow recoveries.”

“A meeting in November, by the Chinese Government, to set a five-year-plan for social, political and economic development in the country will really dictate if China’s demand will increase for Australian products,” he explained.

“But there is also light that Russia is coming and has the capacity to be a very big market for Australian wool, particularly our finer type. The fact that we are going to be able to introduce them to machine washable wool is very exciting for Australian producers."

Last changed: Nov 05 2013

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