Wool prices set to rise 5 per cent
NATIONAL Australia Bank is forecasting a five per cent rise in wool over 2013-14, to average around 1091 cents per kilogram.
The outlook is based on the stronger market performance at the end of 2013 and an expected tightening of supply in the first half of this year.
NAB’s head of agribusiness for South Australia and Western Australia, Matt O’Dea, said wool recorded six consecutive weekly gains from early November until the Christmas recess.
“In the first week of wool auctions this year, the EMI has held its ground at around 1130 cents/kg - this is despite a strong offering of 53,000 bales,” Mr O’Dea said.
“China r e mains t he single largest market for Australian wool, account- ing for over three quarters of all exports in 2012-13.”
In 2012- 13, t he volume of wool exported to China i ncreased by 12 per cent, but a 14 per cent decline in prices during this period saw the total value of exports fall by five per cent.
This was due in part to poorer demand for Chinese woollen exports from larger consumer countries in the European Union and the United States.
But t he setback was partly counteracted by China’s growing domestic demand for finished woollen products, which increased six per cent during the same period.
China now consumes around half of the wool garments it produces, putting it on track to overtake the US as the world’s largest apparel market by 2017.