Do you feel that the supply of natural wool is less and it is unable to meet the market demand? Can you elaborate on it?
Australia's wool production has remained relatively static for the past 3 years or so. The size and profile of the Australian wool clip has changed considerably over the past 20 years demonstrating the Australian wool growers ability to change, to recognize market signals and adopt new business strategies. This are attributes of a healthy and professional industry and this will continue.
Wool is a seasonal commodity, so the demand goes very low in summers. How does this affect the Australian wool industry? What is the alternative for industries to this seasonal demand?
Is it? I would dispute this by saying that wool should and can be worn all year round and that there is market opportunity in this.
From a supply point of view Australian wool production is less seasonal today as wool growers have developed strategies for their wool enterprise to fit into their whole of farm approach to business. Any changes in fashion trends or demand will inevitably be seen as market signals and these are closely monitored by wool growers and service industries.
Let me ask you this, why has the country's wool industry reduced its dependence on Chinese buyers and processors?
It hasn't. Approximately 70% of Australia's wool exports are destined for China. China is an important wool processing hub for wool and Australia's relationship with China is strong. It is equally important to recognize that other countries including India, European and many other countries play a key role in developing competition for Australian wool.
Finally, how do you see the prospects of the country's wool industry in next five years?
Australia's wool production has remained relatively static over the past couple of years and this is likely to remain for the next 3-5years. The key element to the future of wool production will be the state of the market. Wool growers need the market to remain at least at these levels. There are also some parts of the market which have underperformed for many years and the prices in these markets need to improve to provide wool growers with the incentive to continue producing this type of wool.
Seismic fluctuations in any market does not create stability or growth, it creates uncertainty. Australian wool growers make their business decisions looking 5 years ahead and beyond because wool supply is not on tap and whilst it can be stopped, it cannot simply be turned on at will.
The wool industry needs stable markets with steady growth.
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