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Australian wool prices to decline in FY13 - Report
09 Mar '12
2 min read
A continuous rise in price of wool over the last few years has made Australian wool growers happy, with the price on the Eastern Market Indicator setting new records. However, this contentment may not sustain for long.
This is mainly because a fall is now imminent in wool prices, as people's spending on wool items is likely to plummet in the face of global economic downturn.
According to Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) report, during 2012-13 wool prices are likely to keep above the psychological levels of 1,000 cents per kg, at somewhere around 1,085 cents per kg, which would be a fall of about 8 percent from the current levels.
The report says sluggish economic growth, growing redundancy and public debt concerns in several EU nations, and a slowdown in economic growth in the US and Japan are likely to result in a drop in retail demand for apparels, including woolen garments in 2012-13. This holds true even with the expectations that the US's economic growth is likely to perk up in 2012-13.
Global wool prices are prevailing at high levels, mainly because supply from leading apparel wool exporting economies like South Africa, Argentina, Uruguay and Australia remains low, the report says.
According to the report, Australia's wool export volumes are likely to grow by 16 percent to 476,000 tons by 2016-17.
However, before registering growth in export volumes during the projection period, the value of Australian wool exports is expected to drop to US$ 2.67 billion in 2013-14, the report stated.
This is mainly because a fall is now imminent in wool prices, as people's spending on wool items is likely to plummet in the face of global economic downturn.
According to Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) report, during 2012-13 wool prices are likely to keep above the psychological levels of 1,000 cents per kg, at somewhere around 1,085 cents per kg, which would be a fall of about 8 percent from the current levels.
The report says sluggish economic growth, growing redundancy and public debt concerns in several EU nations, and a slowdown in economic growth in the US and Japan are likely to result in a drop in retail demand for apparels, including woolen garments in 2012-13. This holds true even with the expectations that the US's economic growth is likely to perk up in 2012-13.
Global wool prices are prevailing at high levels, mainly because supply from leading apparel wool exporting economies like South Africa, Argentina, Uruguay and Australia remains low, the report says.
According to the report, Australia's wool export volumes are likely to grow by 16 percent to 476,000 tons by 2016-17.
However, before registering growth in export volumes during the projection period, the value of Australian wool exports is expected to drop to US$ 2.67 billion in 2013-14, the report stated.
Fibre2fashion News Desk - India
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