Education key to Indian wool demand

30 Mar, 2012 06:00 AM
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DEMAND for wool in India is on the up and WA is well placed to take advantage of the opportunities that could open up there.

While saying that India "wouldn't be the next China", wool buyer Peter Morris said there was certainly potential there.

Mr Morris, who is managing director of PJ Morris Exports, has recently returned to WA from India.

He said the idea that India has dropped off the radar as a market for Australian wool isn't quite correct.

Mr Morris said the interest was certainly still there.

"There is obviously a lot of focus on China, which is the wool manufacturing centre of the world, but the quality of product being produced in India is of an amazing standard," he said.

"India and China is where we as consumers worldwide are sourcing most of our clothes from.

"As a market, India hasn't dropped off, it's just the focus has been on China.

"It's hard to say but I would estimate that India as a market for Merino fleece wool has grown possibly somewhere around 30 to 40 per cent on what they were buying five or six years ago."

Mr Morris said 70-80pc of wool bought by the Indian market was used for domestic consumption with the balance available for re-export.

Mr Morris disagreed with some sectors of the industry that say India would never be a key market for Australian wool because it didn't meet the three major categories of climate, wealth and population used to define key target markets for Australian wool.

"From what I was seeing and from talking to people and visiting those composite mills where they are looking at processing wool, India is trying to educate the country of the benefits wool offers," he said.

"As the higher wealth band in India purchase very fine, light, high-end, pure wool products, the more money conscious are after polyester wool blends."

Mr Morris said when people hear Indians say they don't wear wool, what they meant was that they wore a polyester wool blend.

"With the price of wool rising, manufacturers are substituting the percentage of wool in the garments," he said.

"On one hand you can say that as wool is so expensive it's losing percentage volume in some garments but on the other hand the huge rising middle class in India means more people are able to afford to buy woollen products."

Mr Morris said many of the Indian companies were becoming world leaders in industry.

"Indians are now spread all over the world and are at the forefront of business" he said.

"The thing that is a real positive for India, is that with its large growing middle class, we are starting to see more women entering the workforce.

"Many of these companies that we are dealing with want 30pc to 40pc women in their corporations working within the next 10 years.

"This means there is a brand new market of people who have never worn wool but want to and can now afford to do so."

With the population of India at about 1.2 billion people and a middle class growing at somewhere around 10 million people a year - roughly half the population of Australia a year - the potential as a market looked strong.

He said developing India as a market would be a slow process.

"Over the next 20 years India could be, with education, a sizeable and valuable market," Mr Morris said.

"Looking at the past 20 years, the country has changed dramatically and so as a market for Australian wool, hopefully India will provide some real options."

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