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Outlook for Wool Jammie Penm Chief Commodity Analyst ABARE.
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Transcript of Outlook for Wool Jammie Penm Chief Commodity Analyst ABARE.
Outlook for Wool
Jammie Penm
Chief Commodity Analyst
ABARE
Outline
• World demand and supply trends
• Australian sheep flock and wool production
• Implications and price projections
World demand and supply trends
• World wool consumption has declined
• But sheep numbers and wool production also declined
• More sheep meat production led to lower supplies of fine wool
World fibre consumption
20
40
60
80
100
1970 1990 1993 1996 1999 2002 2005 2008
0.5
1
1.5
2
2.5
Mt
Source: International Wool Textile Organisation
woolall fibres
Mt clean equivalent
Wool (right axis)
All fibres (left axis)
Sheep numbers, by country
20
40
60
80
100
120
140
160
180
Australia NewZealand
SouthAfrica
Argentina Uruguay UnitedKingdom
1990
2008
million head
Source: International Wool Textile Organisation
Wool production, by country
100
200
300
400
500
600
700
Australia NewZealand
SouthAfrica
Argentina Uruguay UnitedKingdom
1990
2008
kt clean equivalent
production on a seasonal basis (e.g. 2008 = 2007-08)
Source: International Wool Textile Organisation
World wool production, by IWTO grade
200
400
600
800
1000
fine medium coarse
1990
2000
2008
kt clean equivalent
production on a seasonal basis (e.g. 2008 = 2007-08)
Source: International Wool Textile Organisation
≤ 24.5µm 24.6 – 32.5µm > 32.5µm
Australian sheep industry
• Australian lamb slaughters are up
• Wool producers focus more on fine wool production
• Developments in China important to Australian wool industry
Wool production & lamb slaughterings Australia
60
80
100
120
140
1990-91
1992-93
1994-95
1996-97
1998-99
2000-01
2002-03
2004-05
2006-07
2008-09
greasy wool production
lamb slaughterings
Source: ABARE
index 1990-91=100
Micron profile of Australian wool clip
200
400
600
800
1000
1991-92 1994-95 1997-98 2000-01 2003-04 2006-07
19.6-22.5µm
24.6+µm
kt
greasy weight
22.6-24.5µm
0.0-19.5µm
Source: Australian Wool Testing Authority
2008-09
China71%
Other11%
Korea2%
Japan1%
India6%
EU 258%
Chinese Taipei
1%
Australian wool export destinations
Source: ABARE
2008/09 439 kt greasy
equivalent*
*includes greasy, semi-processed and wool on skins
A few observations• China’s wool demand is projected to rise as growth
in demand for textiles & clothing continues
• Competition from other low cost countries will increase over time
• China needs to produce high-quality woollen textiles & clothing to compete
• To achieve that China will have to import more fine wool
Chinese exports of woollen textiles and clothing
20
40
60
80
100
120
140
1995 2000 2007
woollen textiles woollen clothing
kt
Source: International Wool Textile Organisation
Chinese wool production
100
200
300
400
1985 1988 1991 1994 1997 2000 2003 2006
semi-fine 25.1- 40 μm
kt
fine ≤25 μm
Source: China Statistical Yearbook
2008
coarse 40.1 μm
Implications for the future
• Australia will be a major world supplier of fine wool
• Australian sheep flock will rebuild only gradually
• Fine wool prices to be supported by limited supply
Summary of ABARE’s wool outlook for 2010-11
• EMI to average 920 c/kg clean
• Export volume to fall 4% to 385 kt greasy equivalent
• Export value: $2.06 billion
• Sheep flock to increase gradually from 2011-12