AUSTRALIA’S wool exports are forecast to exceed $4 billion in 2017-18 as the value of wool is catapulted into new territory.
Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) attributes the sharp increase in the nation’s wool exports to a three per cent rise in the export volume and a 10pc surge year-on-year in the average price paid for wool.
National Council of Wool Selling Brokers of Australia executive director Chris Wilcox said, if achieved, this would be the largest annual export value for wool since 1994.
The Eastern Market Indicator seasonal average is predicted to spike 9.5pc to 1550 cents per kilogram, potentially marking the highest seasonal average ever recorded.
“It is a rather bullish forecast for both price and production,” Mr Wilcox said.
“The seasonal average ABARES’ forecast will be an all-time record – if it comes about – which would be great.”
He said Chinese buyers’ previous price ceiling had shifted with the industry coming to terms with the new trading territory.
“In the past, Chinese buyers moaned about prices being high but now they are taking a far more mature and pragmatic approach,” he said.
“They are starting to look at improving quality and productivity which is a very different reaction to the market.
“This is not to say there is not some substitution with synthetics or cotton but we get the sense the demand is still pretty solid.”
ABARES revised forecast reflects the increase growth in global demand for woollen textiles and apparel which continues to outpace the country’s growth in supply.
Prices for superfine apparel wool, 19 micron and finer, continue to increase – driving the EMI to a record 1614c/kg in August.
While improved seasonal conditions across Australia’s major sheep-producing regions in 2016–17 led to increased retention of breeding ewes and widespread flock rebuilding, current seasonal conditions are mixed.
“A lift in sheep numbers, and therefore wool production, will depend significantly on seasonal conditions,” Mr Wilcox said.
He said dry conditions in western NSW, eastern Victoria, Queensland and Western Australia had led to a slowing in flock rebuilding compared with last season.
“People are trying to hold onto sheep but are facing significant challenges,” Mr Wilcox said.
In contrast, conditions have been more favourable in eastern New South Wales, western Victoria and south-eastern South Australia, supporting higher rates of flock rebuilding.
As a result of the 3pc forecast increase in national flock, to 73 million head by June 2018, ABARES predicts shorn wool production to rise nearly 4pc to 353 million kilograms greasy.
This is higher than the Australian Wool Production Forecasting Committee’s current forecast of 340mkg greasy.