Analyst encourages industry to take forward view to wool recovery

Positive focus needed to ride out turbulence

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Wool market woes may seem insurmountable, but prices are cyclical and consumers can help provide a lift with purchases of woollen adventure gear and fashion.

Wool market woes may seem insurmountable, but prices are cyclical and consumers can help provide a lift with purchases of woollen adventure gear and fashion.

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Wool analyst calls for perseverance to ride out negative demand effects from pandemic.

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Every day I thank the world that Australian wool growers are so resilient and passionate about the natural fibre they produce.

I was speaking to a Tasmanian Midlands farmer this week who shared his excitement about a world-class irrigation scheme that is about to be constructed through the region.

Almost 11,500 megalitres of high-surety irrigation water will be delivered to 30 irrigators across 56,461 hectares.

This farmer is planning to use the water to double his area planted to high-value crops. But he was quick to reinforce that wool will remain his primary focus.

Considering the current market, this long-term view that wool will come back and again be the 'fibre of choice' inspires me to turn up the volume and dance a merry jig.

When I took on the role of Tasmanian Wool Manager for Roberts Ltd, I made a commitment to always remain positive and forward-focused across the newspaper columns I write, with each grower that I visit and in every meeting that enables me to best position wool in the global market.

This promise will not be broken because, as an industry, it is vital we remain focused, positive, united and strong - despite the ongoing market turmoil.

But there is no doubt our patience and resolve are being tested.

When auction sales resumed last week, the Australian Wool Exchange Eastern Market Indicator (EMI) was at its lowest point in 18 years and it closed 7.6 per cent lower than the previous week.

Substantial falls were recorded for crossbred wools.

New Zealand and South African non-mulesed Merino wool came onto the market, giving buyers additional global supply options that meet customer expectations in regard to sustainability credentials.

When you consider that wool production has fallen to its lowest level in more than 100 years, with a mere 22,700 bales sold last week, it would be expected that the supply and demand situation must soon be reflected in the prices paid for Australian wool.

We need a strong injection of buyer confidence to turnaround the wool auctions and forward markets.

However, with the McKinsey Global Institute rating the apparel sector value chain as being hardest hit by the global COVID-19 pandemic, saying 'Consumer optimism remains muted and spending intent is still below pre-crisis levels', this is unlikely to be in the short-term.

Surveys indicate that many in the trade expect COVID-19 to negatively impact finances and daily routines for the remainder of 2020. So, it's likely that spending - especially at the high end of the market - will remain subdued for at least the coming four months.

But for 2021, subject to no further major lockdowns and outbreaks occurring, analysts are keeping the door open for a positive shift in consumer buying patterns.

There are endless pushes online for people to focus on mending and/or making clothes, and not worrying about seasonal trends or re-stocking wardrobes on a regular basis.

Other campaigns are focusing on encouraging people to shop online and purchase new woollen coats, dresses, adventure wear and home furnishings to support the entire supply chain - from the farmer to the retail outlet.

While commenting on the fact that millions of garment makers have lost their jobs, Bangladeshi garment manufacturer Mostafiz Uddin said in an article in Business of Fashion 'Poverty is a killer too and many more people die from poverty than from COVID-19'.

So, this week, let's think about treating ourselves.

If you can't spend your money travelling the world, why not purchase new woollen carpets for your home, a new suit, a spectacular new coat or some trendy adventure wear to climb a local mountain.

It all helps to support farmers and maintain supply chain jobs.

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