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Outlook for Wool. Jammie Penm Chief Commodity Analyst ABARE. Outline. World demand and supply trends Australian sheep flock and wool production Implications and price projections. World demand and supply trends. World wool consumption has declined

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Outlook for wool

Outlook for Wool

Jammie Penm

Chief Commodity Analyst

ABARE


Outline
Outline

World demand and supply trends

Australian sheep flock and wool production

Implications and price projections


World demand and supply trends
World demand and supply trends

World wool consumption has declined

But sheep numbers and wool production also declined

More sheep meat production led to lower supplies of fine wool


World fibre consumption
World fibre consumption

all fibres

wool

Wool (right axis)

All fibres (left axis)

Mt

Mt clean equivalent

Source: International Wool Textile Organisation


Sheep numbers by country
Sheep numbers, by country

million head

Source: International Wool Textile Organisation


Wool production by country
Wool production, by country

production on a seasonal basis (e.g. 2008 = 2007-08)

kt clean equivalent

Source: International Wool Textile Organisation


World wool production by iwto grade
World wool production, by IWTO grade

production on a seasonal basis (e.g. 2008 = 2007-08)

kt clean equivalent

24.6 – 32.5µm

> 32.5µm

≤ 24.5µm

Source: International Wool Textile Organisation


Australian sheep industry
Australian sheep industry

Australian lamb slaughters are up

Wool producers focus more on fine wool production

Developments in China important to Australian wool industry


Wool production lamb slaughterings australia
Wool production & lamb slaughterings Australia

lamb slaughterings

greasy wool production

index 1990-91=100

Source: ABARE


Micron profile of australian wool clip
Micron profile of Australian wool clip

24.6+µm

22.6-24.5µm

19.6-22.5µm

kt

greasy weight

0.0-19.5µm

2008-09

Source: Australian Wool Testing Authority


Australian wool export destinations
Australian wool export destinations

2008/09

439 kt greasy equivalent*

*includes greasy, semi-processed and wool on skins

Source: ABARE


A few observations
A few observations

China’s wool demand is projected to rise as growth in demand for textiles & clothing continues

Competition from other low cost countries will increase over time

China needs to produce high-quality woollen textiles & clothing to compete

To achieve that China will have to import more fine wool


Chinese exports of woollen textiles and clothing
Chinese exports of woollen textiles and clothing

kt

Source: International Wool Textile Organisation


Chinese wool production
Chinese wool production

coarse 40.1 μm

semi-fine 25.1- 40 μm

fine ≤25 μm

kt

2008

Source: China Statistical Yearbook


Implications for the future
Implications for the future

Australia will be a major world supplier of fine wool

Australian sheep flock will rebuild only gradually

Fine wool prices to be supported by limited supply


Summary of abare s wool outlook for 2010 11
Summary of ABARE’s wool outlook for 2010-11

EMI to average 920 c/kg clean

Export volume to fall 4% to 385 kt greasy equivalent

Export value: $2.06 billion

Sheep flock to increase gradually from 2011-12


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