Australian wool buyers are bailing out of the New Zealand market but China is keeping the market afloat, an Invercargill wool exporter says.
A Statistics New Zealand report said there was a 75-percent drop in New Zealand wool exports to Australia this season. Invercargill wool buyer Bob McLean said China was the main market for New Zealand wool and traditional markets couldn't compete.
"It's just a fact of life, China has become the strongest bidder. The Chinese pay the most for the wool, make the cheapest garments, take the smallest margins and have the biggest throughput," said McLean.
Wool Exporters president John Dawson said there was also less wool being sent to Europe but China kept the market strong.
"Compared to last season, our European customers are taking much less wool, with exports down 14.5 percent. But China continues to grow and so far this season has taken 15.4 percent more than at the same time last year," commented Dawson.
China had 47 percent market share, the European Union 31 percent and Australia just 1 percent, Dawson said.
China spent $231,483,000 on New Zealand wool this season, in comparison to $4,456,000 by Australia.
In a related story, it was reported that the Chinese wool demand is moving from the finer micron wools to the broader micron wools.
"The big movers in the micron types is everything broader than 22. In fact, one of the biggest mills in the world has increased its orders for 22 micron and broader by over 400 percent," said Rowan Woods, Australia wool broker.
Reprinted in part from ABC Rural, AU