Australian Wool Prices Fell To The Lowest Level In 18 Months.

Affected by the Sino US trade war, consumer confidence has dropped, and Australian wool prices have dropped to their lowest level in 18 months. The Australian wool industry hopes to stop the tension between China and the United States as soon as possible.

The eastern composite index (AWEXEMI) of the Australian Wool Exchange showed that the wool price at the end of last week of the 2018/19 financial week ended last week fell 1715 points / kg, down 341 points from the same period last year, down 172 points from the previous month, the largest monthly decline since the Australian wool control was lifted in 1991.

According to Australia Broadcasting Corporation, McNaughton, WesMcNaughton of Fox and LillieRural, said that the recent "abnormal" drop was driven by trade uncertainties.

"About 80% of Australian wool is sold to China, which is affected by the Sino US trade war, and consumers lose confidence," McNaughton said. "People still like wool and want it, but no one will buy it when the world is in turmoil."

During the G20 summit, US President trump (Trump) and Chinese President Xi Jinping held talks in Osaka. During the talks, the president of the United States said that while the two countries' trade negotiations continued, he would not propose new tariffs, but this year traders reported that orders were slowing down and prices were falling, mainly due to the escalation of trade wars.

Wilcox, managing director of the Australian wool marketing brokers' National Council (NCWSBA) (ChrisWilcox) said that the decrease in orders led to an increase in China's processing plant wool stocks. "American retailers are very cautious that they are reluctant to place orders for yarns and fabrics, causing a chain reaction to Chinese factories." Wilcox said the textile industry was overstock because of the expected decline in orders.

The impact of trade wars is not just on the upstream industry chain, MichellWool, but the Adelaide based wool processing and export business is also feeling the pressure of trade war. Reed, President of StevenRead, said fashion brands and garment manufacturers reported slowing sales.

"The tension in the trade situation, the tweets of good news and bad news, and the actual tariffs, all make consumers lose confidence." Reid said.

Despite the gloomy price, the price of wool remains at a record high. Last year, the price of Australian wool reached 2116 points / kg in August, a record high.

McNaughton, a wool trader, said the wool remained healthy and there were some signs of optimism after the Sino US talks over the weekend. We feel that the talks have had some impact, because we get a little positive information from Chinese customers, who are paying attention to the market here. McNaughton said.

Red said, "uncertainty does let consumers tighten their purse strings. Therefore, when China and the United States reach resolutions and agree on new terms of trade, I hope that consumers can return to the market and spend money on the purchase of wool products again."