Slow China Demand Drops Wool Prices
March 14, 2014
With large Chinese top-makers struggling to move wool domestically in that country, the resulting downward pressure on prices in Australia has resulted in a slow market.
In fact, senior wool buyer/trader in Western Australia (WA) for Queensland Cotton Steve Noa said demand for wool from China is so sluggish, the market is as difficult as he has seen it. However, Noa acknowledges a typical autumn would see a slide in prices.
"At the moment, we're trying to find a bottom. I'm trying to find customers that are happy to take some quantity, but at this stage we're losing 10 or 20 cents a week."
As a commercial wool exporter, Noa's advice to WA woolgrowers is to stick to the familiar medium Merino wools.
"There's probably 40 big top-making mills around the world that can process 19.5 to 22 micron wool, and they've tried to comb finer wools but, unless those finer wools are very sound they get a lot of wastage and mills don't like wastage," said Noa. "So it's important that we as WA woolgrowers recognize what we're growing here, what our environment is and stick to those medium Merinos, because every day, regardless of the market, I can generally sell medium Merino wool."
Reprinted from ABC Rural, AU