Australian wool exporters are increasingly concerned that they are selling to one market, China. 80 percent of Australian wool now ends up in China, and as a result, less wool is going to the once powerful European manufacturing countries like Italy.
The changes are blamed in part on the wool export insurance crisis, and there are fears that an over-reliance on Chinese buyers is risky for the wool trade. Credit insurance is needed when exporters sell goods overseas in case customers do not pay; but with the credit crisis, some wool exporters struggled to get insurance, putting the European wool trade at risk.
The Australian wool industry has been trying to do a deal with the federal government to use its credit insurance arm, Export Finance and Insurance Corporation, without success, for months.
Wool giant Lempriere is fed up, saying agriculture isn't a priority for the Australian federal government.
Managing director William Lempriere said the issue has sped up the decline of the European wool trade.
"This is the first time I've been involved in a process like this, and I've just been amazed at the reluctance and lack of urgency that the government applies itself to dealing with some of these issues," he says. "I would have thought, as Australia is reliant on exports, the government would have been more proactive in dealing with these issues."
A spokesman for Trade Minister Simon Crean says the federal government is aware of the issue and that any financial assistance must be in the taxpayer's interest and could be quite expensive in order to cover costs. Wool exporters have been asked to provide details, but the government has received little information so far.
Reprinted in part from ABC Rural Australia