Natural fibre prices to fall in 2020–21

Natural fibre prices to fall in 2020–21

COVID-19 control measures have reduced consumer demand for apparel and disrupted all parts of the clothing supply chain, driving up stocks of unsold textiles and raw fibres. As a result, wool prices are forecast to fall to 12-year lows (in real terms) and cotton prices are forecast to reach their lowest levels (in real terms) since 2001–02.

The world cotton price is forecast to average US67 cents per pound in 2020–21, down by 6% from 2019–20. Interruptions to cotton mill operations during 2020 and reduced retail demand are expected to drive up stocks of raw cotton in key exporting and importing nations.

The Eastern Market Indicator price for wool is forecast to average 1,040 cents per kilogram clean in 2020–21, down by 28% from 2019–20. Wool prices are forecast to be lower due to reduced demand for wool in textile manufacturing. This fall is driven by lower consumer demand for woollen apparel and lower prices for substitute fibres.

Wool production steady in 2020–21

Australian shorn wool production is forecast to remain steady in 2020–21 at 280,000 tonnes, after falling by 5.5% in 2019–20. Low sheep numbers carrying over into 2020–21 are expected to further reduce the number of sheep shorn nationally to 65 million. Average wool cut per head is forecast to rise by 2.9% due to improved seasonal conditions throughout most wool-growing regions.

Prolonged dry seasonal conditions across most wool-growing regions and strong demand for sheep meat (relative to lower demand for wool) caused a total reduction in the number of sheep shorn from 79.8 million in 2017–18 to 68.4 million in 2019–20. Recovery in the number of sheep shorn will rely on flock rebuilding..

Average wool cut per head in 2020–21 has been revised up since Agricultural commodities: June quarter 2020, due to improved seasonal conditions in New South Wales, southern Queensland, Victoria and Tasmania. Continued rainfall and pasture growth could see average wool cuts revised higher in December or March. However, this upside is constrained by sheep currently holding drought-grown wool in their fleeces. For example, sheep brought to New South Wales from Western Australia in the first half of 2020 will still have 3 to 6 months of wool grown in dry conditions

Source: / ABARES

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