September 2005 - U.S. wool producers and others around the world have seen a softer wool market this year compared to last and, unfortunately, forecasters don?t see an end to that trend in the near future. In fact, The Woolmark Company (TWC) says the weakness could persist until early next year for Australian wools.
?The U.S. wool market typically follows that of the Australian market,? says Rita Kourlis Samuelson, deputy director of operations and wool marketing director for the American Sheep Industry Association (ASI). ?Although our prices are soft, there is still a positive demand for U.S. wools because of our presence in the international wool marketplace.?
TWC attributes the soft market to an intense competitive environment and because of the over capacity at the early-stage processing and spinning levels. In addition, the currency is playing a major role in the wool market because the Australian dollar is strengthening against the U.S. dollar.
?This currency difference is causing more resistance to Australian wools because of the higher price,? says Samuelson.
In addition, the July revaluation of the Chinese Yuan makes imports into that country relatively cheaper, which is a positive for both the U.S. and Australian wool market because imported wool will be more affordable for Chinese buyers. This situation may lead to an increase in demand and to stronger prices.
ASI has been working to increase the demand for U.S. wools through a number of avenues. One method is hosting international wool buyers to U.S. wool warehouses so that buyers can be exposed to the types of wools found in the United States. This program compliments other ASI programs which help build the demand for U.S. wool, such as being instrumental in the development of new wool products that have wash-ability and next-to-the-skin wear characteristics and negotiating with the U.S. military to enhance their orders of wool apparel.