Drought rings in lowest medium merino wool output in 20 yrs
05 Aug '05
1 min read
Supply of Australian medium merino wool (20-25 micron) is well below the levels of the past 20 years or more.
Australian production of medium merino wool is down to less than half of the 1992/93 levels and the stockpile, which was mainly medium merino wool, was sold off at the end of 2001, further cutting into supplies.
The intense drought in eastern Australia in 2002 (which has continued in some states until recently), high sheep-meat prices and low prices for this wool in the 1990s have all contributed to this decline.
With much lower supply, prices for medium merino wool have been above the levels seen in the 1990s, even though demand for this wool has been on a declining trend since the start of the 1990s.
The value of Australian exports of medium merino wool has fallen steadily, indicating that prices have not lifted by enough to compensate for the sharp fall in supply: in other words, the underlying demand for medium merino wool has fallen.
The main reasons for this decline in demand is competition from other commodity-priced fibres, notably cotton, polyester and acrylic, combined with significant downward pressure on clothing prices around the world.
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