Industry News

Industry News

ABARES, the Australian Government’s agricultural forecasting and research agency, released its new five-year forecasts for Australia’s agricultural industries on 6th March. It is very bullish about wool after the price rises in the past 12 months. It now predicts that the EMI will lift from a season average of 1,630 c/kg this season to an average of 1,700 c/kg in 2018/19 and continue to rise to 2,015 c/kg by 2022/23. ABARES says that the predicted lift in the EMI “…reflects strong demand for superfine wool (less than 19.5 micron), but growth in supplies is expected to remain limited” and “…demand for superfine wool is expected to remain strong, supported by income growth in major apparel-consuming regions…”.

Despite the continued rise in wool prices, ABARES forecasts that shorn wool production will only increase slowly, from 346 mkg in 2017/18 to 365 mkg in 2022/23. If correct, this will continue the essentially static level of production recorded for Australia since 2008/09, with year-to-year variations largely driven by ups and downs in fleece weights reflecting variable seasonal conditions.

One reason for this only small increase in shorn wool production is that ABARES expects the Australian sheep flock to rise only moderately, to 83 million head by the end of 2022/23. This is up from 73.6 million head at the end of 2017/18. But, more particularly, ABARES expects there to be more Crossbred and meat-breed sheep added, rather than Merino sheep. As a result, ABARES has forecast that the number of sheep shorn in 2019/20 and beyond will be LESS than the number of sheep, presumably because of the rise in sheep that are never shorn. This has never occurred, at least since 1981/82 (which is as far back my database go). I doubt it has ever occurred in Australia. With higher prices and a small increase in production, ABARES predicts that Australian wool exports will rise to $4.62 billion in 2018/19, then lift further to $5.74 billion by 2022/23, up from $3.62 billion in 2016/17.

Further details including a table showing the key forecasts for the next five years for the Australian wool industry is contained in the latest edition of the NCWSBA Weekly Newsletter, available to NCWSBA members.

National Council of Wool Selling Brokers of Australia

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