China covers itself with Australian wool
Audio 01:23
A sheep wool producer at his property in Bookham, New South Wales, Australia, October 6, 2020. REUTERS / Jill Gralow
By: Olivier Rogez Follow
4 min
Boosted by Chinese purchases, the price of wool is breaking records in Australia, the world's largest producer.
A welcome increase after a difficult but still fragile year.
Publicity
The Sydney Wool Exchange has not seen such a celebration for at least two years.
The prices of wool keep rising.
Around 30% since September.
More for even the superior qualities of ultra-fine merino.
The movement is all the more spectacular as the quantities sold are also on the rise.
Producers are indeed taking out the bales of wool stored since the start of the pandemic, when the market had suddenly collapsed due to the global trade crisis, following the Covid-19 pandemic.
According to Agence France Presse, auctions went from 30,000 to 45,000 bales per week at the end of October.
This dynamism can be explained in large part by Chinese purchases.
Weavers and workshops in the Middle Kingdom buy around 80% of Australian wool.
Australia is the world's largest producer with a herd of 65 million sheep.
In China, the activity is divided into clothing and distribution.
The workshops are also restoring stocks which had decreased in recent months.
It remains to be seen whether the movement started in September will be sustainable or not.
And in this regard, a lot will depend on Europe and North America.
Markets were dynamic in the spring, but the return of lockdowns augurs well for a return to calm this fall.
European distributors could therefore be encouraged to reduce or postpone orders for woolen clothing to the Asian industry.
Soaring wool prices could quickly turn out to be a flash in the pan.
Newsletter
Receive all the international news directly in your mailbox
I subscribe
Follow all the international news by downloading the RFI application
google-play-badge_FR
Australia
China
Raw materials
Trade and exchanges
On the same subject
Raw materials chronicle
Can China do without Australian coal?
Raw materials chronicle
Coronavirus investigation: China threatens Australia's barley exports
International guest
Tensions between China and Western countries: "Hong Kong and Taiwan are at the forefront of the confrontation"