In Short Supply, The Price Of Wool Is High.

Australian Wool Innovation Limited (AWI) latest market intelligence report pointed out that in the 2010/11 financial year, all fiber prices fell from its peak.

AWI also pointed out that wool prices (fine, coarse and carpet wool) performed relatively well - mainly because of the current global

The report continues - - in this context, some trade news is noteworthy.

In response to market changes, compared with wool, synthesis

The prices of synthetic fibers in the Chinese market have fallen rapidly (accounting for 60% of global output), reflecting the overproduction of domestic products and the weakness of export markets.

Prices are expected to stabilize after Christmas, mainly due to the low production capacity of the processors.

In the northern hemisphere harvest season, cotton prices returned to their original level after a rapid fall.

However, this should not be regarded as a consumer demand indicator - it is reported that China's "national cotton purchase and storage plan" has largely supported cotton prices.

If the cotton price in the domestic market is lower than the state's temporary cotton purchase and storage price, it is currently 3 US dollars per kilogram (and at the same time satisfying other conditions), and the state will implement the acquisition.

However, in view of the fact that this year's output will exceed the demand of about 2 million tons (7.5%), there is still concern about the sustainability of price.

Further decline in prices may lead to a shift in production capacity to grain and oilseeds.

Supply tension seems to be the main driving force for high wool prices. Because of the competitive demand for mutton, this situation is unlikely to change rapidly.

AWI released a report two months ago to outline who should be the target customer group if we want to increase the demand for rare and precious natural fibers, such as wool.

The report analyzes whether the wool industry should pay attention to the high-end consumer groups, or should take the route of small profits but quick turnover.

The Clint Laurent team, a well-known global demographics company, has recently completed a global population trend study for clothing and footwear consumption.

The study was funded by AWI.

The main points of the study are:

5% of the population (about 280 million) spends at least 1200 dollars a year on clothing and footwear - the average person spends about 2300 dollars per person per year.

In the next 10 years, their spending will increase by 39%, from 643 billion to 894 billion.

3%, or 168 million of the population expenditure, accounting for 12% of all clothing and footwear expenditure, and expected growth of 30% in the next 10 years.

In short, consumers account for 50% of clothing and footwear, and these consumers account for only 8% of the population.

In terms of regionalism, there is no doubt that most of these consumers live in developed countries - North America (USA, Canada), Western Europe (Italy, France, Germany, the United States, etc.) and Japan.

According to the AWI report, these conclusions are very important for investment positioning. In particular, some people believe that wool producers can only earn 2-6% from the retail price of kilograms of wool garments, and in the long run, the retail price of wool will probably increase if manufacturers want to increase their income.