Mr. Segard trusts that the persistent demand for wool will continue, but competitive pressure from other fibers will also increase. Wool producers and the wool industry need to promote and publicize vigorously.
Mr. Curtis believes that the supply of wool products will take a longer period of time to increase; and with the continuous growth of the world population, the demand for food, clothing, and housing will also correspondingly rise. Consumers seem to be increasingly supportive of wool. Mr. Curtis claims that part of the reason for this "close wool sentiment" surge is due to the wool campaign.
The news of steady market demand in China has been recognized by New Zealand Wool Board. Mr. Al Ross, who has just finished his visit to China, said that there is more demand than supply for carpet yarn production in China. This demand mostly comes from the domestic market in China, as its carpet export volume is less than 10%. Since wool carpets are sold as luxury items, and the demand for luxuries in China has not been affected by the slow economic development and the financial crisis in Europe and America. Mr. Al Ross said that this demand is extremely high, and many manufacturers have even shifted from hand weaving to producing carpet yarn to meet market demand. "Investment in new equipment is quite substantial, using the latest technology from Italy, Belgium, and the United States, so the quality of finished products has greatly improved."
The Economist Intelligence Unit (EIU) is an economic intelligence provider headquartered in the UK. According to EIU, the average selling price of (Merino type) wool clothing in the 2011/12 season should be around 12.32 Australian dollars and will remain above 10 Australian dollars until the end of 2013.
"New Zealand wool is positioned as a high-end raw material for woven carpets. The continued growth of China's luxury goods industry, hotel industry, and recently the residential industry all help stimulate the increase in demand for New Zealand wool," said Mr. Al Ross.
The proportion of top wool exported from Uruguay to China has dropped from the previous 47/52% to 32.9%, with a total export volume reaching 21,200 tons. China remains the main export destination for Uruguayan top wool. Italy and Germany account for 33% of the top wool exported to China, and exports to other European countries have increased. This proportion once reached 50%, which has not been seen for many years.
Martin Curtis of Curtis Wool Direct Purchase Ltd in the UK commented that we expect gradual improvement in the economic levels of the UK and the US in 2012. The economies of China and the Far East will continue to grow at a rate slightly below double digits, while the European economy will experience a series of fluctuations. The production of British wool, New Zealand wool, and Norwegian wool has significantly declined because these countries are major producers of high-quality crossbred wool, leading to a situation where the supply of wool cannot meet the demand.
However, we all know about the uncertainty in wool prices, and the uncertain factors in the current European and American economies still exist.
Repetitive fluctuations, unpredictable, difficult to control, exciting, full of challenges - this is the characteristic of wool prices described by wool traders, exporters, and processors. The Australian Wool Innovation (AWI) Market Intelligence Report predicts that in the near future, the Eastern Market Index (EMI) will remain around 12 Australian dollars.
Uruguay's largest top-making company, Lanas Trinidad, optimistically believes that next year's market will be more "rational." Professor Pedro Otegui said that in the 2011/2012 season, Uruguay will start with "zero inventory." "There will be no inventory for wool producers, processors, or exporters, nor will there be carryover inventory from other wool-producing countries. Wool buyers have remained cautious over the past few months and also do not have large inventories."
Consistent with the AWI statement, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) also predicts that the Eastern Market Index for Australian Merino wool will remain around 12 Australian dollars.
Mr. Segard is a member of the Executive Committee of the International Wool Textile Organization (IWTO), witnessing IWTO's dedication to the global wool cause and its commitment to coordinating the development of the wool textile industry in member countries. However, there is no such thing as a free lunch, he said, and IWTO sincerely welcomes external funding support. Some political actions in the southern hemisphere wool-producing countries also help unite the entire wool textile industry.
So far, the Chinese market has accounted for 48% of New Zealand's wool exports this year.
The situation for carpets and indoor wool products is somewhat different. The markets in Europe, the US, Australia, and New Zealand are very quiet. The demand for wool is decreasing, and alternative fibers are receiving more attention, Mr. Segard said.
We understand that wool exporters are optimistic about the demand for wool, feeling that the overall demand will increase.
"This year's wool production is similar to last year's," he said, "given the excellent weather conditions this year, the quality of wool is expected to improve."
Mr. Olivier Segard of Segard Masurel in France believes that currently, the demand for apparel wool in the European market is slowing down. Nonetheless, retail wool seems to be more than before. This might be the reason why wool prices have not fallen sharply in recent months. Besides, the situation now is different from the end of 2008, as there is not much wool inventory. Due to the consistent basic demand for wool, the trade of raw wool and preliminary wool processing will not stop.
Mr. Segard pointed out that due to China's increasing demand, wool prices have so far remained at market price levels, but we really don't know how long this can last. The uncertainty of the global economy will eventually affect the demand in the Chinese market. However, when overall confidence recovers, we will again see a healthy developing crossbred wool market.
This article comes from Global Textile Network. Please indicate the source when reprinting! Additionally, the current situation is different from the end of 2008, as there is not much wool inventory. Due to the consistent basic demand for wool, the trade of raw wool and preliminary wool processing will not stop.