June 15, 2007
June 15, 2007 - Seventeen wool-scouring mills are reported to be temporarily closed in the city of Wuxi in Eastern China due to a severe outbreak of contaminated water caused by algae in the nearby Lake Tai. The city is one of China's major wool-processing centers. The closed plants are understood to be small operations with old machinery that pump out effluent. Sources close to Wuxi say that major wool-processing plants have not been affected.
The algae bloom, which smothered Lake Tai at the end of May, lasted six days until it was flushed out by rain and water from the nearby Yangtze River. Wuxi draws its water from the lake. Experts expect Wuxi to suffer from contaminated water for the next few months, and some residents have begun fleeing the city. Tap water has become undrinkable, and reports have emerged of organized protests. Residents near the lake have campaigned for years for the closure of polluting factories. Last week, the government demanded that officials close several hundred lakeside factories by the end of the month.
Although local officials blame the problem on natural conditions, Chinese state media and government experts have criticized officials for ignoring pollution and its effects.
The developments in Wuxi are believed to be an associated factor on the dips in the Australian market this week, which fell by a further 1.3 percent, or 13 cents. China remained relatively quiet, though it is considered unlikely that this is a direct result of the problems in Wuxi, with none of the major wool-processing plants affected.
However, with observers pointing out that it only takes a small level of uncertainty to shake a high market, talk is growing in Australia of the extent to which Chinese mills will be affected by increasingly severe environmental problems caused by the rapid industrialization across the country. With China accounting for 70 percent of Australia's wool exports, the trade has feared closures like those in Wuxi for some time. There have even been some suggestions that China is now trying to talk the wool market down. Reprinted in part from The Wool Record Weekly