Commencing the conversation, we would request you to share more about how your company came to being and what share does it enjoys in Australian Wool market? Any memorable episodes you may like to share with our million over global visitors?
New Zealand Wool Services International Ltd (WSI) was formed in 1992, initially on behalf of the New Zealand Wool Growers. Today WSI is a publicly listed company, however still has a very large wool grower shareholding base.
WSI is the largest Wool Exporter in New Zealand owning two of the most advanced wool scours in existence. We account for 30 percent of all wool exported and 40 percent of the carpet type wools exported.
WSI is particularly active in the carpet wool sector, which accounts for approximately 85 percent of the type of wool grown in New Zealand.
The small amount of Merino and Mid Micron wool grown here are of a very high standard and easily compete with comparable wools from Australia. These wools account for 15% of our production and are considered a niche fibre within our market place attracting very strong international attention as well as relatively high prices.
Can we have a closer look on Australian wool industry through your valuable outlook?
In recent times the carpet wool types produced in New Zealand have struggled to make sufficient returns for the Wool Growers. A sustained period of low wool prices, high production costs for Growers as well as low meat prices have impacted significantly on our local industry. This has made many wool farmers turn to other options, such as Dairy, Deer, Beef and Cropping at the expense of our national sheep flock, which is anticipated to reduce from 39 million sheep to 35 million over the next 3 years.
If the current pressures continue to exert themselves, we anticipate this trend will continue resulting in a major reduction in wool production from New Zealand and stimulate some local participants to exit the industry.
WSI, however has invested in the future of the New Zealand wool industry by building innovative scouring plants, developing a wide client base and establishing close contacts with Wool Growers. We have launched a branded Supply Contract under the PURELANA brand aimed at giving surety of supply to our clients as well as sustainable returns to growers.
How about wool industry’s global market size? What is going on therein in terms of current trends and market movements?
The global wool supply is also shrinking, as is reflected in the 2 percent share it now holds of all textiles world wide. This is down from around 4 percent just 10 years ago. The world sheep numbers have been reduced due to drought, disease and a lot of animals have been consumed as a food source and are not being replaced, especially in countries that have faced food shortages due to economics or conflict.
This rapid decline in sheep is now creating a supply/demand imbalance. Apparel wools have recovered significantly over the past season and look set to continue to be well sought after. Prices for carpet type wools, especially in New Zealand, are also starting to feel the benefits. In the past six months the value of New Zealand crossbreds has increased 23 percent over and above any currency adjusted advantages. However, though this is creating a price recovery, values are still well below sustainable levels.
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.