Wool prices have continued sharply falling this week in Australia. Sales of wool apparel have eventually fallen at retail, after prices have excessively risen in the past 12 months. The surge of wool prices has destroyed demand, not surprisingly, as reflected by latest US wool apparel import data.
Wool prices have further fallen this week in Australia, with the benchmark indicator losing 60 Aussie cents or 3.2% in local currency terms.
The same EMI has even lost 49 US cents or 3.7% while being down 38 euro cents or 3.2%.
Prices have fallen across the board in the past weeks and the sudden decline of other textile fiber prices in the past two weeks will certainly not help.
From their level three months ago, prices in most wool categories have lost more than 10% and they have even more dropped from their level a year ago.
There are a large number of factors offered by commentators, including the fast deterioration of US-China relationship in the past weeks.
The real reason behind the current fall of wool prices lies with the previous surge of wool prices over a decline of available quantities.
The long-term drought in Australia has slashed offer from wool growers and boosted prices consecutively.
Textile and apparel producers have enthusiastically passed the surge in prices with final consumers being eventually asked to digest the sharp increase of wool prices.
Wool apparel sales have apparently suffered from such a rise in prices, as reflected by the fall of US wool apparel imports in the first quarter this year, in volume terms.
Leading apparel chains have struggled for hiding the rise of wool prices, for instance through including a small share of cashmere fibers into wool sweaters in order to give a luxury touch to low-priced products.
They have also tried to replace 100% wool by 100% cashmere products.
In both cases, wool fiber use has dropped and wool prices are now feeling the consequences.
Source: Emergingtextiles
