While there has been much talk about increased buying by China as the driver of wool prices, one factor helping boost demand for Merino wool prices is the state and outlook for the global economy. To my mind, it is economic conditions, good or bad, that is the bedrock of wool prices and particularly for Merino wool. The good news for prospects for wool prices is that world economic conditions are improving and for the first time in seven years it seems that the advanced countries and developing countries will record a synchronised surge of economic growth in 2017 and 2018. This is illustrated by the OECD’s Composite Leading Indicators for the advanced wool consuming countries (the US, Germany, Italy, the UK, France and Japan) and for China, which both show a clear and strong upturn for the rest of 2017. This could help explain the lift in Merino wool prices, particularly for fine and superfine wool.
Full details including a chart showing the OECD Leading Indicators for advanced economies and for China, compared with the 19 Micron Price Guide is included in the NCWSBA Weekly Newsletter for the week ending 24th March 2017. Available to NCWSBA members.