2011 was an excellent year for wool with strong demand for wool products and raw wool in the first half of the year, soaring prices for competitive fibers and low wool supply combining to bring the highest wool prices in Australian dollars since 1988 and record prices in U.S. dollars.
Demand weakened in the second half of the year as a result of a slowdown in the European and U.S. economies. Supply, however, remained tight.
Prospects for the wool industry in 2012 will be dominated by concerns about the European and U.S. economies. However, low competitive fiber prices and very tight wool supplies will also be major and conflicting factors in the direction of wool prices.
Reprinted in part from Landmark