PRODUCE more wool was the clear message Andrew Rintoul, Dongiemon and Tilba Tilba Merino studs, Williams, returned with after a recent tour of China.
At 44, Mr Rintoul was one of the older members of a tour organised by Australian Wool Innovation (AWI) to give young woolgrowers some global perspective of their industry, so he was possibly more aware of the historical context behind processors’ and garment manufacturers’ requests for more wool.
While demand from China and good wool prices in the past two seasons appears to have halted a year-on-year trend of declining shorn wool production in Australia – down from more than a billion kilograms greasy in 1990-91 to an estimated 345 million kilograms for the current season on AWI figures – it has highlighted China’s awareness of the industry’s vulnerability.
“Their (Chinese wool processors’ and garment manufacturers’) major concern is supply going forward,” Mr Rintoul said.
“They are not so concerned about price, with the massive investment they have put into processing wool they want to know that their supply (of raw material) into the future is secure.
“They just want us to produce more wool.
“(In China) I was asked if I thought some of the farmers who had got out of sheep to concentrate on cropping, might come back into the industry now that the prices for wool made it much more worthwhile.
“I had to tell them that I didn’t think so.
“Much of their (sheep and wool) infrastructure has gone - or in disrepair – and they’ve invested their capital into cropping,” he said.
Mr Rintoul said while the scale of the industry and ongoing investment in new technology for wool in China reinforced his own belief in the future of wool, the obvious demand had caused a rethink.
“I always thought it was supply that drove (wool) prices up, but its (record and near-record prices in the past five months) been driven by demand,” he said.
“And from what we saw and were told, I don’t think the prices are going to fall away dramatically anytime soon into the future.
“They’ll come down a bit possibly, but they will still be at very good levels compared to what they were prior to the past two to three years.
“People also have to remember that back in the late 1980s when wool prices were even higher than what they are now, it was only for fleece wools.
“Oddments were worth nothing compared to today.
“Advances in technology and processing means they have developed ways of using all the oddments, so the whole clip now has a value which is better for the woolgrowers’ bottom line.
“I’ve got no doubt at all there’s a massive long-term future for wool.”
Mr Rintoul spent a day at the AWI headquarters, Sydney, learning about the latest advances in wool processing and its marketing before the group of 12 – he was the only WA woolgrower on the tour – flew out to China.
The group also visited the AWI Shanghai office and The Woolmark Wool Resource Centre in Hong Kong on the way back to Australia.
In China participants visited Red Sun, an early-stage processing operation where wool is scoured and carded through an automated operation.
Then they visited a spinning processing plant, To Xinao, where the AWI/Woolmark-Xinao development centre is located to encourage innovation in knitwear.
They also visited the Mengdi Group’s circular knitting mill and Nanshan’s massive vertically-integrated fabric processing operation.
“In some of the places we were told to put our cameras away because they don’t want other processors knowing what they are doing,” Mr Rintoul said.
“Everyone is trying to find their special niche, something that will give them a market edge.
“I must say, I was very encouraged by the AWI work done in research and development of these new wool products, they’ve done a great job in expanding the market for wool, with some of this demand only just starting.
“They’ve worked with these wool processors helping develop new innovative products.
“They told us they didn’t want to disturb the traditional wool market – suiting, jumpers and socks – but wanted to attack new markets for wool, like leisure wear, sports wear and even waterproof.
“We were told in 2019 there will be more wool, it will be in things like a wool-denim mix.
“We saw the circular knitting which is used for the next-to-the-skin knitwear and there’s a greater awareness that with the soft-touch fine wool knitwear, wool could actually start to challenge cashmere in that market.”
One of the processors, Mr Rintoul said, had specifically pointed out to him the potential for soft-touch fine wool to move into the prestigious market area dominated by cashmere.
Considering the price for cashmere was $100/kg and fine wool was $18/kg, there appeared to be a lot of potential in that market segment, he said.
They also saw a new product called sculptured Merino which was a fabric featuring a three-dimensional effect on its surface, Mr Rintoul said.
“We saw some completed trial garments made out of that.
“They’re using a mix of Merino wool from about 17.5 micron through to about 22.5 micron to produce it.
“They’ve found that the different micron fibres react differently to their processing.”
Given that clips from his family’s commercial and stud ewe flocks – 1700 sheep producing 17 micron superfine wool and about 7500 sheep producing 19 micron medium wool, fall within this range, the new development was of particular interest, he said.
Mr Rintoul said the group also saw new investment in wool processing like a new dyeing facility designed to give the processor “more flexibility”.
While processors obviously wanted to keep mills “running 24/seven”, he said, they indicated they were not prepared to buy wool unless they had a specific order they needed it for and there were no large stockpiles.
They also liked the economies of scale that came with large orders, much preferring them to small runs, but there was still potential for “small tonnages” of specialist wools that suited particular marketers’ requirements.
Mr Rintoul said processors had tightened up on specification and were concerned about volume.
“They were almost optimistic,” he said.
“Their biggest issue is supply going forward.
“They don’t necessarily want us to change what we’re doing, they just want us to produce as much wool as we can.”