Fine wool producers of Australia can expect better prices, as China and Russia boom, according to a report released by Rabobank.
In spite of a recovery experienced during September, fine wool prices continue to prevail at historically low levels, Weekly Times quoted Robobank’s Luke Chandler as saying.
Mr. Chandler said poor retail demand in some of the major markets resulted in greater market volatility and slowing down of fine wool orders across the supply chain.
However, with rising interest of Russia in Australian wool and growing demand for luxury items in China, it is expected that the two economies may outshine the traditional fine wool consumers in developed countries, which would be a positive development for the Australian fine wool industry, Mr. Chandler said.
China’s use around 40-50 percent of its raw wool imports, which mainly constitutes of medium and broad wool, for domestic consumption. However, the booming luxury goods market and a considerable rise in retail clothing sales signal that conditions are developing for a rise in demand for fine wool items in China.
While superfine and ultrafine wool exports registered a rise during last fiscal, raw wool demand kept low and that of medium micron wool slumped, Mr. Chandler said.
