Since peaking in the 2000/01 season, fine and superfine merino wool prices have been on a declining trend. For the 2004/05 season to the end of May, fine and superfine wool prices in A$ terms were dramatically below the seasonal average registered in the 2000/01 season.
Despite the decline in prices, demand for fine and superfine wool from Australia has lifted strongly in the five years between 1999/00 and 2004/05. It is the only wool type that has seen demand growth in both value and volume terms in the past five years.
However, this growth in demand has not been enough to offset the very strong growth in production of fine and superfine merino wool over the period.
Production of fine and superfine wool now accounts for a third of Australia's total wool production.
While breeding decisions made five to eight years ago have been a major factor in this growth, drought conditions in the eastern half of Australia since 2002 have also contributed to the rise.
This annual growth in production has overwhelmed the lift in demand. Combined with currency exchange, and China factors over this time, this exceptional growth in production has resulted in lower than hoped for prices for fine and superfine wool.
This in turn may curtail the growth in production of fine wool, allowing demand to catch up and bring better prices.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
