Wool rally to end?
Also in the fibres market, commentators were cautious on expectations for a further rise in Australian wool prices, raising their forecast for year-end prices by 29 Australian dollar cents a kilogramme to 1341 cents, but remaining well below the record price of 1546 cents reported on March 17, 2017
“The uninterrupted rise seen since the beginning of the year came on the back of surging demand from Chinese buyers who have depleted their stocks, coupled with a decreasing supply of wool from Oceania due to less favourable weather conditions over the past months,” FocusEconomics said.
However, Australian Wool Innovation took issue with ideas of output decline saying that Australia, the top exporter, “is producing approximately 3 % more wool than last year and over 6 % more first-hand wool has been offered so far at auction this year.
“Supply, or lack of supply as incorrectly stated by many, is clearly not the driver of this market,” said AWI, a not-for-profit organisation paid for by a levy on Australian wool exports.
The group flagged instead that “growing demand for the Merino fibre in particular is a fact, demand has actually been building for years.
“Many in the industry cite the growing use of wool against the skin in sports and outdoor wear as a strong influencer in this growth”