The Australian wool industry's economic hangover from COVID is starting to ease according to Australian Wool Innovation's chief executive officer, John Roberts.
"Although Covid no longer dominates the headlines, it left a damaging financial legacy, with many of our markets having experienced challenging economic conditions during 2022, made worse by the conflict in Ukraine and rising energy costs," Mr Roberts said.
"The largest market for Australian wool, China, has had its own Covid issues, with its strict Covid suppression measures having caused logistic issues as well as a dampening of domestic consumer spending during 2022."
China is the first stop for 80 per cent of raw wool exports from Australia and half this wool stays in China after processing.
This means 40pc of all Australian wool is sold at retail in China, so an improvement in export conditions means plenty for the Australian wool producer.
According to the March Intelligence Report released by AWI, other overseas wool markets are also recovering post-Covid.
The other 60pc of Aussie wool heads to consumers in countries like Japan, Germany, France, South Korea, UK, Italy and the USA.
Japan's figures are down below 2020 levels of US$790 million and the UK has not recovered its imports back to pre-pandemic levels but all other major destinations have recovered with the USA leading the way with a 42.6pc lift in wool imports over the last 12 months.
US wool apparel imports continued the positive trend in December of 2022, up 16.7pc on December of 2021, and closing out the 12-month calendar year of 2022, up 42.6pc on the previous 12 months.
Backing this overall recovery story in the United States is the continued growth of Merino wool being used in active outdoor wear as well as the growth in sales outside the traditional colder seasons.
One example is Ralph Lauren, who report some groups of consumers - especially those in middle- and higher-income segments - focus on buying good quality that lasts rather than buying cheaper, more disposable items.
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Wool has even made it to the America's Cup with The Woolmark Company and the Luna Rossa Prada Pirelli sailing team unveiling ground-breaking Merino wool technical garments to be worn by the team across all training and sailing activities, in the 2024 competition in Spain.
With a focus on technical performance, and the added benefit of not contributing to microplastic pollution in the world's oceans, Merino wool is the preferred fibre for the sailing group.
"The previous edition of the America's Cup proved how Merino wool is the perfect partner to ensure high-quality performances thanks to its natural qualities," Lorenzo Bertelli, Prada Group Marketing Director & Head of Corporate Social Responsibility said.
"We are pleased to extend the presence of this 100pc natural fibre also in the training uniforms, underlining once again the team's commitment to safeguarding the oceans,"
Despite these high profile customers, uncertainty continues to hang over international markets due to various factors including interest rates, the threat of recession and the war in Ukraine.
In their report, AWI said consumer confidence in China is very hard to judge given the lack of trade data coming from that country and that the optimism many commentators had for wool in 2023 is yet to fully play out.
CEO, John Roberts is focussed on the positives.
"There are forecasts of more positive global economic conditions - and the relaxing of COVID-related lockdowns in China has laid a good foundation, with consumer confidence and market growth expected to improve significantly in the country during this year," he said.
"Previous logistic issues that had been hindering processing/manufacturing and shipping have also diminished.
"Importantly, the EMI has started strongly which is encouraging and hopefully a positive sign going forward."
