Australian Wool to receive more consumer support next year
Australia’s wool supply is expected to increase during the 2020/21 season, according to Rural Bank’s Australian agriculture outlook 2021, but remain below average, and improved seasonal conditions will allow sheep numbers to begin to rebuild from the lowest level on record.
“The Australian wool market is expected to receive support by strengthening consumer demand in China where its more advanced recovery from COVID-19 compared to Europe and the US has led to more favourable economic sentiment. However, in the short term the economic impacts of resurgent COVID-19 outbreaks in the US and Europe are expected to weaken demand for woollen apparel.
Rural Bank regional manager agribusiness Mr Williams said ‘the first half of 2021 is expected to see the Australian wool market slowly recover from a challenging year in 2020.’
“Improved seasonal conditions will aid flock rebuilding and drive increased supply which will place some pressure on wool prices.
“This is expected to be offset by slow improvements in demand which could lead to a steady recovery in prices in the first half of 2021,” he said.
The bank said the extent and speed of a recovery in wool prices will largely depend on how quickly retail demand recovers in the US and Europe, adding to already improved demand in China. A recovery in these markets in early 2021 could allow the Eastern Market Indicator to trend along the upper forecast range and return above 1300c/kg by June 2021, the outlook report said.