European debt crisis has negatively impacted the prices of fine wool, especially in West Australia.
Usually, European nations buy Australian fine wool for preparing high-end fashion items. However, the ongoing debt crisis in Europe has led to a situation where fine wool costs have declined to almost same price level as the ordinary wool.
Last year, a kg of fine wool fetched around Au$ 6 more than ordinary wool, but this time the price gap has narrowed down to just 80 cents, the lowest since 2003, according to West Australian sheep farmers.
Experts say international buyers and retailers are cautious while purchasing wool items owing to the volatile global economy.
Moreover, Europe is confronted with several adversities, which has led to a fall in retail sales there and this is impacting demand and prices of Australian wool, particularly fine wool, as Northern European region consumes most of the Australian fine wool.
Fibre2fashion News Desk - India