Wool prices rise to new heights
WOOL prices have risen to highs not seen in Australia in decades due to growing export demand and limited supply, according to Rural Bank’s 2017 Australian Wool Annual Review.
Stronger demand from processors and reduced supply saw the Eastern Market Indicator (EMI) rise by 10 per cent to 1507 cents/kg in the first half of 2017, while the 17 micron price guide rose 45 per cent over the past 12 months.
Wool prices are expected to remain strong in 2017/18, particularly for fine to medium wool categories, supported by growing export demand and limited, albeit now growing, supply from Australia.
The new report, launched by specialist insights team Ag Answers, provides producers and industry with a concise analysis of the Australian and global wool sector.
The report also revealed reduced wool exports from major producers such as New Zealand, which will see Australian wool growers well positioned to enjoy the rare conditions of increasing production levels and higher prices.
After almost 20 years of declining shorn wool production, the 2015/16 financial year appears to have marked the turning point, with shorn wool production expected to reach 341,000 tonnes of greasy wool in 2016/17, an increase of five per cent when compared to the previous year.
Andrew Smith, general manager Agribusiness for Rural Bank, said increased wool production was largely driven by the expanding national flock, set to rise by four per cent to 76.6 million head by June 2018.
“All states, except for Tasmania, experienced higher production levels, with favourable seasonal conditions boosting fleece weights for producers in the northern regions and Western Australia.
“Wool growers are very keen to hold sheep – particularly wethers, with some producers experiencing gains in wool production per head due to shearing on a more frequent basis.”