Wool market projects a promising future

14 Apr '08

2 min read

Although wool prices eased on an average last week, producers are confident about an optimistic future of the industry.

A number of Queensland merino studs went short of rams in recent weeks indicating that prices are at good levels standing at around 80 cents higher that they were a year ago.

Investors are optimistic about wool market getting back on its usual track. Reports accumulated till April 2008, showed wool prices rising in terms of US dollar which reflected a fall and lowered demand.

However, prices surged in terms of euros and Aussie dollars. Experts believe that the market is dominated by weakness in demand from China but fine-quality wool is likely to continue to attract strong interest.

Market surveyors have forecasted that for the period 2008-09 (July-June), wool prices are likely to remain firm and supply and demand trends is anticipated to be finely balanced.

However, by 2012-13, prices for clean wool is projected to decline by 17 percent to 776 Australian cents a kilogram because of increased supply from expanding Australian sheep flocks.

Infact, due to an unpredictable US economic growth, even for 2008-09, there may be a marginal one percent fall in the prices of clean wool to 960 Australian cents a kilogram.

The California Wool Growers Association holds that farmers have fetched prices ranging from US $1 a pound to as high as $1.66 compared to 50 cents a pound a couple of years ago.

Higher demand for California wool was recorded due to drought in Australia and New Zealand.

In contrast, fine and superfine wool prices in US registered a steep rise. In January 2008, both 18 and 19 micron category wool prices were at 100th percentile, reaching the highest level (in US$).

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