June 29, 2012
Most wool-producing countries are trying to come to grips with the slowing demand from China.
The lack of orders from Europe has reduced production in China with both wool top and yarn manufacturers unable to sell at past levels to their traditional markets in Europe and the United States. Although the demand from the United States is on the increase, this on its own will not be sufficient to replace the lack of demand from Europe. Feedback from exporters in China indicates that demand from Europe has reduced by more than 30 percent.
According to Robert Wang, China manager for Australian Wool Testing Authority (AWTA), top makers and yarn manufacturers in China are going through hard times. The slowdown is reported by a majority of Chinese factories. Some are reduced to running only three days each week and some have shut down completely.
The high wool prices have not helped this situation. Although prices have come down a little, they are still high compared to two-to-three years ago.
"In some ways, the reduction in demand and the reduction in wool production, coming at the same time, can be seen as something of a blessing," said Wang.
Reprinted in part from Woolnews.net