CHINA’S next winter fashion fad could determine the direction the WA wool market takes in the next few months.
For the past two northern hemisphere winters, stylish women’s fashion jackets made in a variety of styles, lengths and colours from an innovative double-faced woollen fabric, has driven apparel manufacturer and wool processor demand for WA’s natural fibre.
Fashion trends have long overtaken traditional wool clothing – as in winter uniforms for the military and public services providers like train drivers – as the significant determinant of demand for wool in China.
Australian Wool Exchange (AWEX) statistics show 75 per cent of all Australian wool sold is destined for China and Australian Wool Innovation (AWI) research indicates about half of it stays there after processing and manufacture.
So Chinese winter fashion trends are expected to play a big role in determining demand and price levels into the future at the Western Wool Centre (WWC).
Wool buyers who deal into China say although it is spring there now, with winter still nine months away, the fashion houses are already looking ahead at what garments they will produce and promote for next winter.
They are also looking at what fabrics they will use and at the latest fabric innovations on offer.
According to wool buyers at the WWC, decisions those fashion houses make in the next month or so on what they produce and stockpile over summer and autumn and promote for next winter, will have a significant influence on whether the wool market continues to rise into next season.
No one is yet convinced the double-faced women’s jackets will be a big fashion item for the third winter in a row, but they also expect wool to be a part of any replacement fashion trend.
Until decisions like that are made in China, most buyers like Modiano Australia wool buyer Greg Horne, expect the WWC market to mark time for a period.
“I don’t think we will see it (market) fall much or rise much for a while, particularly on volumes (of wool available),” Mr Horne said.
Buyers expect strong demand for better specification wools to continue but faultier types – the dry autumn and winter last year, followed by sudden rains and a rush of spring growth resulted in a lot of less desirable mid-break wools this season – becoming more difficult to sell at current price levels.
This prospect appears to be borne out in last week’s trading at the WWC.
For the first time this year the volume of wool passed in at the live auction on Wednesday, having failed to reach reserve prices set by growers and brokers, went past 20 per cent.
During trading the passed-in rate at one stage hit 25pc, or a quarter of the wool being rejected by buyers because they were not happy with the specification or thought growers wanted too much money for it.
At the end of the day 22.9pc of the wool on offer failed to find a buyer, the highest passed-in rate since last September, according to AWEX technical controller at the WWC, Andrew Rickwood.
Effectively, that put demand for the wool on offer on Wednesday last week back to levels prior to its record-smashing price run from November through to mid February.
There has now been four trading days since a price record was set at the WWC and by the end of last week the Western Indicator had eased a further 25 cents per kilogram to 1834c clean, still well ahead of the benchmark Eastern Market Indicator which dropped 27c to 1751c/kg.
The finer end of the WA market, 18-19 micron wools, were hardest hit, dropping up to 70c/kg, while the mid and broader micron wools finished down between 25c and 40c.
Buyers were less critical on Thursday last week and the passed-in rate eased to 7.8pc.
This week’s WWC offering was forecast to be about 550 fewer bales than last week, at 9048, with some no doubt making a reappearance, albeit with new reserve prices.
There will be no live-auction sales next week at the WWC due to Easter.
