AWI Market Intelligence Briefing – November

AWI Market Intelligence Briefing – November

In its November Market Intelligence Briefing Australian Wool Innovation (AWI) outlined wool production, prices, and the impact of Covid. It also looked at China’s domestic market consumption and US wool imports.

For the season 2021/22 to date, there has been 104.5 million greasy kgs of wool tested, which is 23% above last season’s numbers and 9% above the 2019/20 season. Promising however, is that this season’s totals are still above 2019/20 levels. All states have experienced a significant increase on last season’s numbers. Comparing this season to two seasons ago, all states are up – Tasmania 29% up, New South Wales 19%, Queensland 15%, and Victoria 9%. South Australia’s clip is unchanged and WAs has declined 5% on levels from two seasons ago.

Since January 2020, before the pandemic the Australian EMI was at 1,578 Australian cents, and now as of October 2021 is at 1,341 Australian cents, which is a 15% drop. In US Dollar terms, the EMI has declined only 4%, which is somewhat a truer indication of the market. Therefore, the EMI is only slightly off pre-pandemic levels. The best performing wools have been the finer wools, with the 17-micron wools well above January 2020 levels, increasing 19%. The price discrepancy between the finer wools and broader wools has grown as a result of the pandemic. The broader wools, indicated by the 30-micron wools, have unfortunately decreased quite significantly with a drop of 50% since January 2020.

Apparel Trade
Wool Apparel Trade is still below 2019 levels but for the first 6 months of 2021, was above 2020 levels. Despite there being no direct wool consumption statistics, trade data provides a good indication of wool consumption trends. Given the seasonality of Wool as an apparel product, most of the wool importing is done in the last 6 months of a calendar year. As economies open after lockdowns for the best part of the last two years, there is optimism that consumers will be back buying garments over the Northern Hemisphere Winter.

China Domestic Consumption
The National Bureau of Statistics China reports that retail sales of garments have remained
consistent throughout the pandemic and now as China heads into the winter season, wool
apparel sales are expected to maintain this trend.

US Wool Import
In the US wool apparel imports have bounced back significantly in September in the lead up to the Winter season. The US Office of Textiles and Apparel (OTEXA) shows imports of men’s and women’s wool knitwear and next to skin apparel have now recovered to 2019 levels.

In the US, indications are that consumers are still shy to go into stores and feel more
comfortable to shop online. If they are instore, they want to limit time in and out and would
rather use a smartphone to look up product than to ask a salesperson for help.

Everything is about comfort and versatility; consumers want something that they can feel comfortable in back in the office and professional enough for home on video calls. There is more desire for garments to be able to be worn all day across working, exercise and relaxing. Knits are selling the most.

More and more brands are moving away from traditional sales market calendars as lead times on production are getting extended, there has started to be a shift to more pre-order to ensure brands meet production minimums.

Source: AWI