22 February 2017

Wool market: China buys 1.11 billion worth of Australian wool

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By Lyndal Reading - The Weely Times

Wool market: China buys $1.11 billion worth of Australian wool

 

THE value of Australian wool exports to China hit an all-time high for the first six months of the financial year.

China bought $1.11 billion of Australia’s wool, from July to December last year. It was a 19 per cent increase on the same selling period in 2015.

Wool volumes to China increased 13 per cent for the same period and make up 77 per cent of Australian wool exports.

Overall, the value of wool exports climbed to $1.46 billion for July to December last year, the highest since 2002-03.

The figures from the Australian Bureau of Statistics came as the eastern market indicator hit a new high of 1440c/kg last week.

National Council of Wool Selling Brokers of Australia executive director Chris Wilcox said the value of wool was much higher and production much lower than in the 2002-03 season.

He said from July to December 2016 Australia sold 156 million kilograms of wool for $1.47 billion, while in July to December 2002 this figure was 273 million kg for $1.95 billion.

“It’s the value that’s important because the price of wool is higher,” Mr Wilcox said.

“Wool production for the 2015-16 season was the lowest since 1923-24.”

For the first six months of the selling season, China bought 119 million kg, in comparison to 104 million kg for the same period in 2015.

Australian Wool Network wool technical manager Kelvin Shelley said the lift in volume brought China back to 2014-15 levels.

“China did drop off quite a bit in the past two years, particularly in crossbred wool,” Mr Shelley said.

“Some companies struggled with the high crossbred prices and that flowed into Merino wool.”

Mr Shelley said China traditionally bought 19-22 micron wool but more recently had been competing to buy 16-17 micron wool.

“They thought they could process the 19 to 22 at the same level as the Europeans process the 16 to 17 micron, but now they’re really pushing the Europeans to get that wool,” Mr Shelley said.

“The value of our wool to China has really lifted because they are buying at the finer end.”

Exports to South Africa increased 485 per cent, from 34,968kg to 204,856kg.

Mr Shelley said South Africa had a lot of low yielding and dusty wool and wanted quality wool from Australia.

Stacks of wool bales ready for export to China
Competitive, Proven, Trusted
Greasy Wool Greasy Wool