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Beyond the Bale : March 2015
MARKET INTELLIGENCE 53 Wools in the 24 to 32 micron range and cardings of all types and descriptions have enjoyed very good to record price levels in recent months. The combined AWEX 28 micron indicators finished February 2015 at 814 cents per kilogram clean, which shows the trading is in its 100th percentile over the past five years. Merino cardings, also used in knitwear, are also in their 100th percentile with their combined indicator finishing February at 909c/kg. In fact, the carding sector has never been higher on average. AWTA key test data has shown a gradual increase in production of the broader wools and steeply in some cases such as the reported 32 per cent increase in 29/30 micron wools tested from November 2013 to November 2014. As growers revert to a mixed sheep strategy, mainly to take advantage of the relatively high lamb meat market prices available over recent years, the growth of the broad wool supply is highly likely to continue. As those growers move into their second cross progeny shearing, the micron will broaden further as the Merino influence from the first cross is diluted even further. The change in fortunes for broader wool has come as no surprise to IWTO President Peter Ackroyd who is also the Chief Operations Officer of the Campaign for Wool as well as AWI’s Global Strategic Advisor. In these roles Mr Ackroyd speaks with many retailers, brands and wool processors, particularly since the Campaign for Wool began in late 2010. He has written the following with regards to demand for broader wools: Since the financial crisis of 2008, austerity has stimulated demand for the durable and the sustainable in fashion. This trend has very much favoured the woollen-knitted look in tweeds, bulky knitwear and accessories. Woollen spinners and weavers have enjoyed unprecedented growth over the past five years with market leaders such as Woolmark licensee Abraham Moon (230 employees) seeing turnover double in the past four years. Moon's Yorkshire Tweed (around 23 micron) sells particularly well in the UK, the USA and Japan and boasts customers such as Ralph Lauren, J. Crew, Hackett, Brooks Brothers at the premium end and Marks & Spencer in the middle market. Several other mills have benefitted from the booming global woollen trend. Production of Harris Tweed (founder members of the Campaign for Wool) in the Scottish Hebrides has risen from 420,000 running metres in 2008 to 1.2 million last year. Similar increases in production and sales of woollen goods have been seen in China, principally to feed the tweed and broader micron demand in the UK and Japan. One very positive trend to emerge from the surge in woollen production has been the return of wool into women's wear, primarily in coats, but increasingly in what Marc Bolland, CEO of Marks & Spencer refers to as 'fashion layering', a trend for knitted woollen sweaters, jackets, capes, shawls, scarves and heavy skirts and pants as part of one overall coordinated look. This essentially woollen look is seeing a resurgence of worsted fabrics in some women's wear collections, unprecedented since the 1980s. Marks & Spencer is a keen Campaign for Wool supporters. "Wool was in danger of disappearing from the radar if the Campaign for Wool had not supported broader micron weavers and played the slow fashion, value for money, ecological card in the first years of the recession," said John Walsh, Managing Director of Abraham Moon. The Campaign for Wool is funded by Australia, New Zealand, South Africa and UK, with some extra financial assistance coming from Uruguay, USA and Norway. The Campaign, being multi stakeholder, is to be somewhat 'ecumenical' in its approach and application of funded programs in order to satisfy growers of various micron wools, from 11.5 to 35 micron. See page 5 for more information about the Campaign for Wool and page 26 about demand at the world's largest trade show for interior textiles, Heimtextil. THE BROADER WOOL AND CARDING PHENOMENON ACpercleankg Calendar year average 0 100 200 300 400 500 600 700 800 2004 2005 2004 2006 2007 2008 2009 2010 2011 2012 2013 2014 464 521 471 470 451 469 463 656 607 636 675 CAMPAIGN FOR WOOL COMMENCES END OF 2010 28 MICRON CALENDAR YEAR AVERAGE MERINO CARDING CALENDAR YEAR AVERAGE ACpercleankg Calendar year average 0 100 200 300 400 500 600 700 800 2004 2005 2004 2006 2007 2008 2009 2010 2011 2012 2013 2014 417 424 424 566 481 525 625 752 647 786 795 CAMPAIGN FOR WOOL COMMENCES END OF 2010 MORE INFORMATION Weekly price reports and other market intelligence reports from AWI are available from the AWI website at: www.wool.com/marketintelligence.