Oil Madness Helps Wool

July 11, 2008 - As oil prices ratchet ever higher, wool looks more attractive. With synthetics being a competitor to some broader apparel wool, growers should take heart that record petrol prices are not all bad news.

Australian Wool Innovation market intelligence chief economist, Paul Deane, says the wool to synthetic price ratio is presently at about 3.6:1 and the wool to cotton ratio is 4.8:1.

"Wool is currently looking more competitive from a price point of view," Deane said. "Synthetics have become steadily dearer in recent years and while wool has been at record levels in U.S. dollar terms, it is still very competitive.

"Cotton has also become more expensive as a significant amount of land in the United States has been taken out of cotton production due to the growth of biofuels. In recent years, the wool to cotton ratio has been more like six to one."

The price of synthetic fibers, such as acrylic, is not a driver of oil prices, but definitely follow the trend oil takes given they are a direct byproduct of fuel production from crude oil.
Reprinted from Stock and Land, Australia

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