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Beyond the Bale : September 2016
MARKET INTELLIGENCE 53 In this article we look at the performance of wool over the past 15 years in comparison with other competitive fibres in the market. Acrylic, Nylon, Polyester and Cotton are important markers against the EMI for wool, as they can be a cheaper source for fabric production, and can impact directly the return for Australian woolgrowers. The above graph shows the EMI price against the other competitive fibres. During July 2001-2007, generally the EMI gradually slipped in price and the gap between the value of wool against other fibres narrowed. It slipped even to the point where the value of wool at 7.54 $/kg in October 2006 was worth less than nylon at 8.25 $/kg in the same month. Essentially, Australian woolgrowers were not seeing the deserved return on investment compared to the cheaper to buy yet even cheaper to produce synthetic fibres and cotton. To arrest this trend, marketing was reintroduced in 2009 by AWI to re-add value to the EMI, boost the return for growers and reposition wool as a premium natural fibre. Since the 2008/09 season it is evident that a correction of wool’s value against other fibres has occurred. The trend has slowly but surely increased from 2008/09 to 2015/16 with the value of the other fibres remaining low. Whilst wool is a commodity it will always follow other commodities through price peaks and troughs, however the increasing gap between wool and other fibres since 2008 is proof of the return of consumers’ willingness to pay more for a high quality product and ultimately increase the return in the pocket for Australian woolgrowers. MARKET INTELLIGENCE REPORT RISE IN PRICE OF WOOL VERSUS OTHER FIBRES FibrePrice(AUD) $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 July 2001 July 2003 July 2005 July 2007 July 2009 July 2011 July 2013 July 2015 EMI ACRYLIC NYLON POLYESTER COTLOOK A INDEX July 2001 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 PriceRatio July 2003 July 2005 July 2007 July 2009 July 2011 July 2013 July 2015 WOOL:ACRYLIC WOOL:COTTON July 2001 7.0 6.5 6.0 3.5 4.0 4.5 5.0 5.5 3.0 2.5 2.0 PriceRatio July 2003 July 2005 July 2007 July 2009 July 2011 July 2013 July 2015 WOOL:NYLON July 2001 2.5 2.0 1.5 1.0 0.5 0.0 PriceRatio July 2003 July 2005 July 2007 July 2009 July 2011 July 2013 July 2015 WOOL:POLYESTER July 2001 July 2003 July 2005 July 2007 July 2009 July 2011 July 2013 July 2015 7.0 6.0 5.0 4.0 3.0 2.0 1.0 PriceRatio Source: PCI Fibres, AWEX , Cotlook
In the Shops - September 2016