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Australian wool prices declining on reduced demand
23 Dec '11
2 min read
The prices of Australian wool are declining owing to the reduced demand for the fibre in international markets, the National Australia Bank has said.
NAB has chosen wool as 'commodity in focus' for its December Rural Commodities Wrap, in which it predicts wool prices to average AUD 11.39 per kg in financial year 2011-12.
Wool prices have come down drastically after reaching a record peak in June this year. In November, wool price on Eastern Market Indicator (EMI) was 15 percent less than the peak price recorded in June.
However, the price seems to have stabilized at around AUD 12 per kg during late November and early December. In fact, the prices of wool rose late in relation to other commodities, whose prices rose in later part of 2010. The decline in prices has also started late, the NAB said.
The NAB Agribusiness report says the demand for wool will be further affected owing to the prices of wool still being higher compared to other alternative fibres, and particularly due to financial crisis in the advanced economies that are leading consumers of wool items.
The study says the demand for apparels in China and for textiles in the US is improving, which would buffer the affect to a certain extent, but it would not be able to completely offset the loss due to weakness in developed economies, especially the eurozone.
However, NAB added that it does not expect the wool prices to dip below the AUD 10 per kg mark in 2011-12 as the supply situation remains tight.
NAB has chosen wool as 'commodity in focus' for its December Rural Commodities Wrap, in which it predicts wool prices to average AUD 11.39 per kg in financial year 2011-12.
Wool prices have come down drastically after reaching a record peak in June this year. In November, wool price on Eastern Market Indicator (EMI) was 15 percent less than the peak price recorded in June.
However, the price seems to have stabilized at around AUD 12 per kg during late November and early December. In fact, the prices of wool rose late in relation to other commodities, whose prices rose in later part of 2010. The decline in prices has also started late, the NAB said.
The NAB Agribusiness report says the demand for wool will be further affected owing to the prices of wool still being higher compared to other alternative fibres, and particularly due to financial crisis in the advanced economies that are leading consumers of wool items.
The study says the demand for apparels in China and for textiles in the US is improving, which would buffer the affect to a certain extent, but it would not be able to completely offset the loss due to weakness in developed economies, especially the eurozone.
However, NAB added that it does not expect the wool prices to dip below the AUD 10 per kg mark in 2011-12 as the supply situation remains tight.
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