Wool prices have weakened in recent weeks, as have the prices for other raw materials such as cotton, iron ore, metals and oil. This decline has been caused by the heightened uncertainty about the Euro-zone economies in the wake of elections in France and, in particular, Greece at the start of May.
In spite of the pull-back in wool prices, they remain above prices seen for much of the past four years. In the past two or three years, prices for sheep products (either wool or meat) have performed better than prices for other competing agricultural products. The Australian Bureau of Agricultural and Resource Economics (ABARES) expects wool prices to perform better than other non-sheep agricultural enterprises, such as wheat and beef. ABARES also expects lamb and mutton prices to do better than these other agricultural enterprises.
Reprinted from Wool Economic Focus