EXPORTING WOOL │ THE SMART EXPORT SERIES
Exporting Wool from Australia
Where’s the opportunity?
Australia is the largest exporter and producer of wool in the world, with industry exports valued at approximately $3.5 billion. Wool production is forecast to increase by 4.4% during 2022-23. Above average rainfall over the past year have bolstered pasture quality and resulted in an increase in national sheep heard quantities. Demand for wool apparel products such a sweaters suits and coats are also on the rise particularly in markets located in China, US and the EU.
Australian wool is known for its innovation and high quality with world-leading systems in clip preparation and sustainable farming practises. The Australian made label has high social value in global export markets. Australian producers of wool and wool products often compete with other brands that use relatively cheap synthetic fibre and other wood substitutes materials. The top industries to enter are textiles (including woven apparel and knitwear) followed by premium bedding, upholstery, and carpet. There is an increasing demand for fine and superfine wool used in tailored and high-end fashion. On the other hand, demand for micron wool used in blended polyester wool fabrics, coast and outwear is expected to fall.
The domestic price of wool is forecasted to increase by 16.5% during 2021-22, to reach $13.904 /kg due to global economic recovery. While this is the case, prices will be expected to decline by 2.9% next year brought on by the increase production of wool.
Australia’s premium wool quality is what differentiates itself from other synthetic wool brands overseas. Highlight any quality and functional properties of Australian wool in promotion initiatives. Third party resellers like AuMake are lucrative channels for brands targeting the Chinese market. Brands may also consider selling at local souvenir shops to target overseas tourists.
Demand for Australian wool in Europe is expected to be especially strong. China remains the top importer of Australian wool. Traditionally, Chinese demand has been largely determined by United States and European Union demand for garments and other wool products. This drove increased demand for wool over much of the past five years, due to strong demand from the United States and the European Union for Chinese manufactured wool products.
Our Strategic Takeaways
There will always be keen buyers of Australian wool, particularly because of its unique aesthetic characteristics and functional properties. The main challenge for the industry is competing with cheaper synthetic wool brands which threaten the share of Australian wool as an input in clothes manufacturing. Overall, we see it as a moderately attractive industry to enter both for producers of wool and wool products