Wool Market Reports
Wool Market & Business Update Summer 2015
At the time of this writing, business conditions within the global wool textile industry during 2015 have improved in many ways compared to the results achieved in 2014. Looking ahead the economic indicators for the major wool consuming countries is generally positive for the remainder of this year, which should be advantageous for sustained improvement of wool product demand and raw wool prices. However there are risks that could affect this positive outlook given some of the fragile and volatile global economic and political conditions that currently exist.
At this stage it is not known what effect if any the recent stock market correction in China or events in Europe ie Greece default and the depressed Eurozone economy will have on the wool market. If consumer confidence waivers it could have a negative impact on retail sales which would ultimately affect wool demand and wool prices down the road. In view of these recent events, analysts are forecasting that there quite likely could be a lot of volatility in equity and commodity markets for the remainder of this year. As always, global currency exchange rates will be very much affected by this and will continue to be one of the principal drivers leading the direction of the wool market.
China continues to be extremely important to global wool trade. As an example, approximately 80 percent of Australian and New Zealand wool production is now exported to China for early stage processing. Some mills in China are currently facing a shortage of cash flow and tight credit control is making trading conditions difficult. Major changes continue to take place within the Chinese economy as it transitions from a manufacturing export model to one that is focused on catering to domestic consumer demand and service industries as the middle class continues to rapidly grow. A large new middle class is emerging across Asia as a result of rising incomes. Much of this growth is coming from China, of which the working population is larger than that of the USA and Europe combined. The increase in purchasing power will have a strong effect on the global economy in years to come.
China’s annual economic growth rate is still expected to remain high at around 7% for the next two years which should be helpful for wool prospects. With the significance of China to the wool trade and the ongoing global uncertainty, it is impossible to predict the future direction of the wool market but in recent months it has held up reasonably well. Global wool production continues to remain static at best and is expected to stay at around current levels, or decrease slightly. At this stage there is no sign of a sustained recovery in sheep numbers from any of the major producing countries.
In 2015 CCWG has continued to forward contract the Canadian wool clip to world wide customers that we have established in China, USA, Europe, India, Uruguay and Canada. Our standards of consistently graded and objectively measured wool has enabled CCWG to sell Canadian wool into these markets with trust and confidence, we are grateful for the excellent business relationships we have developed with a large network of international wool buyers. I am optimistic that wool financial returns will be better for many grades in 2015 compared to the previous year.
For more information on the wool market or assistance in marketing your wool clip with CCWG, please contact the undersigned.
Eric Bjergso, General Manager
Eric Bjergso, CCWG General Manager
Delegates attending the 27th International Wool Trade Fair & Information Conference
Mr Song Lin Zhang, Chairman China SDIC International Trade Co., Ltd (left) and Eric Bjergso, CCWG General Manager conclude some Canadian wool business
CCWG trade show booth attracts attention
The 27th International Wool Trade Fair & Information Conference was held in Qingdao, China. Nearly 500 representatives from 26 countries attended the three-day conference from September 11th-13th, 2015.
\Nanjing Wool Market Conference is an annual meeting of the global wool industry that facilitates discussion on current industry issues, future developments, and new market opportunities. Participants include growers, traders, primary processors, spinners, weavers and garment manufacturers, together with organizations involved in the wool related pipeline.