Wool production is at a 70 year low globally, but is still outperforming most other commodities. Retail sales around the world are seeing slower growth rates. The growth in demand is slower than what has been seen in supply, so there is something of an imbalance.
China buys 70 per cent of Australia's wool clip, but there is increased demand in Europe. The rising European interest is acting as a counter to Chinese dominance in the market. Global demand will drive what happens to prices in the next 12 months.
A shift in the global, China-dominated demand for raw wool will push up wool prices everywhere. The number of China's wool processing plants has dropped from 2500 to 2000 in just five years.
Sports wear has traditionally been dominated by synthetic fibers, but natural fibers like wool have superior qualities. Wool keeps a person cool when it's hot and warm when it’s cold. Apart from this wool is anti-microbial and anti-odor.
A conference was held in Australia a few days ago to discuss the latest wool trends, innovations and what the future holds for the industry. There was a large contingent of Chinese delegates as well as buyers and sellers from all over the world, including Argentina, Uruguay, Italy and New Zealand.