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Beyond the Bale : March 2018
WOOL AND SHEEP PRODUCTION IN CHINA The People’s Republic of China is Australia’s first and foremost valuable trading partner for wool. This current season has seen China importing more than 74% of all Australian wool grown annually, and that will roughly equate to a seasonal projection approaching AU$2.6 billion of raw wool value. While Australia is world’s largest producer and exporter of raw wool, China has more sheep than any other country – see Table 4. Successive and consistent Chinese Government policy of expansion and development of sheep industries across the inland provinces and grassland ranges has prevailed since the mid-1950s. Deng Xiaoping solidified this policy during the 1980s by specifying a priority of increasing production “for domestic consumption”. The policy gained further impetus at the beginning of this century with the “Accelerated Livestock Development” plan which not only quickened the expansion of sheep enterprises but specifically emphasised the development of “fine wool production” as a key part of that strategy. Much of the sheep industry today is dominated by two directly opposing ownership models. The traditional and numerous small villager household production and the other being large and modern factory farms, with the former in decline and the latter becoming more common place and the most economically sustainable model. Grazing has been steadily waning, with intensive feeding the replacement, as a result of feed crops becoming more prevalent. This supplementary feeding provides a more predictable and cost-effective alternative to grazing. Government grassland ecology protection restrictions also played their part. Small farmers are not left out as they exit the industry, as they are in most cases employed by the larger operators to manage and run the massive sheep enterprise investments. In China, the total domestic wool production is estimated at 280 million kgs of greasy wool, including fine wool, semi-fine wool, coarse wool, cashmere and so on – see Table 1. As cashmere is included, it can be assumed that a portion of the figures are goat sub-species. In China, there are five main wool- producing areas – see Table 3. Average MARKET INTELLIGENCE REPORT In this article we look at wool and sheep production within the People’s Republic of China (PRC), given the importance of the country's contribution to the global economy and wool industry. TABLE 1: CHINA DOMESTIC WOOL PRODUCTION (MKG GREASY) (SOURCE NWM) Wool type Fine Semi-fine Coarse Cashmere Others Ave micron 25.0 and finer 25.0 -32.0 32.0 plus 15.8 Production 80mkg 100mkg 50mkg 20mkg 30mkg Ave micron Kid sheep (15 months old) - rising two tooth Live-weight post shearing (kg) Shorn wool clean kg Staple length (mm) Live-weight post shearing (kg) Shorn wool clean kg Staple length (mm) Ram 70 5.5 90 38 3 105 Ewe 40 3 90 32 2.5 105 TABLE 2: CHINA MERINO SHEEP PER HEAD AVERAGES (SOURCE NWM) Area Heilongjiang Gansu Sunan Xinjiang Wushenqi - IM Qinghai Sheep Meat and wool sheep Fine wool sheep Fine wool sheep Fine wool sheep Meat and wool sheep Ave micron 22.6 -24.1 21.0 19.5 -21.0 19.5 -21.0 22.5 Ewe 3,300,000 1,180,000 51,000 1,200,000 450,000 TABLE 3: MERINO SHEEP EQUIVALENT STOCK IN SELECTED CHINESE ‘FARMS’ (SOURCE NWM) TABLE 5: CHINESE SHEEP FARMS PER FLOCK SIZES Annual head count Number of ‘farms’ Less than 100 17,000,000 100 to 500 340,000 501 to 1000 35,000 More than 1000 10,000 TABLE 4: TOP 5 COUNTRIES OF SHEEP POPULATION Country Number of sheep % of global total 1 China 187 million 16.0% 2 India 75 million 6.5% 3 Australia 70 million 6.0% 4 Sudan 53 million 4.5% 5 Iran 49 million 4.0% number of sheep on each farm is about 400-500. When you factor in the average yield and processing losses cumulatively at 40%, that equates to roughly 32 million kgs clean for apparel production. China, similar to Australia, faces the influence of competing uses of land. High sheep meat prices and returns from farming of forest or pastures are a hindrance to further sheep number growth in China. The wool production is forecast to be similar next year. China is the world’s largest producer of sheep meat, with an annual output that, in 2013, was twenty times more than that of traditional exporters like Australia (Du-Bois and Gao 2017). Massive sheep farms in western Inner Mongolia have been developed with the aim to capture the majority of the Chinese domestic market and become a major supplier of high-quality mutton to the rest of Asia. MARKET INTELLIGENCE 63
In the Shops - March 2018