A new report says 2020 has hit the wool industry with a “bank of swans.”
The monthly update from Australian Wool Innovation (AWI) uses the quirky phrase to express the rash of unforeseen disturbances that have taken a toll on the market for wool.
“With global markets floundering while trying to gauge the potential impact on supply chains and general economic health of the coronavirus, the wool industry was disrupted by having auction sales cancelled due to a cyberattack on software provider Talman,” AWI said. “Forwards traded lightly as growers and traders reevaluated hedge levels. Wool particularly, and apparel fibers in general, have been relative flat although volatile since Christmas.”
AWI said forward markets exporters were still wary “but bidding up to cash out to May.” For now, “If sales can be mounted in an orderly fashion and wool move through the pipeline we would anticipate renewed exporter interest,” AWI said. “If not buyers will logically factor in further risk into their prices and discount further.”
There are many significant factors in the wool market currently, AWI noted, including lower wool supply and low stocks of wool in the processing pipeline, slower economic conditions in key consuming markets and in recent weeks the onset of COVID-19.
“Given that China is Australia’s biggest partner for the processing of our fiber and also our biggest consumption market for wool apparel products, it’s hard not to imagine that from an apparel consumption point of view and a commerce or trading point of view, coronavirus will have some effects on the wool industry and the fashion industry in general,” the report said. “The widely held expectation that the wool market would drop after the discovery and spread of COVID-19 has not eventuated, yet. In fact, the wool market has lifted during the period since disease notification.”
The value of the Eastern Market Indicator (EMI) has increased by 24 cents to $10.54 cents from $10.30 in the past month.
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“Despite the drought biting hard throughout 2019, many woolgrowers were clearly not willing to sell their wool at lower prices,” AWI said.
Meanwhile, the industry has continued its multi-season marketing push with mills and designers.
In the latest effort the Woolmark Company supported Zegna Baruffa Lane Borgosesia for the spinner’s Spring/Summer 2021 collection to enhance the natural characteristics of merino wool and create yarns with exceptional breathability, lightness and adaptability suitable for all seasons.
“Merino wool is the perfect natural and precious fiber to create a product that carries within itself the values of comfort and well-being, sustainability and excellence of made in Italy,” Woolmark said. “Naturally biodegradable and renewable, wool represents the natural choice to respect the planet while wearing a comfortable and luxury garment.”
To support the launch of the collection, a campaign created in collaboration with Woolmark Company will highlight the discovery of the multiple characteristics of wool and its potential applications in summer knitwear creations. A campaign video, which premiered at the opening of Pitti Immagine Filati, enabled visitors to explore the journey of the product and merino wool.
Anlaby Station, Australia’s oldest merino wool sheep farm, created a six-piece travel collection using luxuriously soft 19 micron Australian merino wool. Pieces include a sweater, T-shirt, leisure pant, eye mask, travel poncho and a shawl that can double as a blanket on flights.