4. GLOBAL WOOL PRODUCTION
Production of wool in the five major exporting countries
is estimated to be around 1100m.kg. greasy in 1997-98 (approximately 760
m.kg. clean), a decline of around 35% from the peak in 1989-90 (Figure 8).
Australia's estimated wool production of 640m.kg. greasy
(435m.kg. clean) is down 38%, but still comprises around 58% of total
production by the five exporters. Production of wool in New Zealand, South
Africa, Argentina and Uruguay should be around 465m.kg. in 1997-98, a
decline of over 30% on the 1989-90 peak. Factors contributing to the
decline include low wool prices and more attractive alternative uses of
land, contributing to a growing disillusionment with the wool industry.
Although Australia presently contributes over 55% of all
raw and processed wool entering world trade, its prominence is even
greater (70%) with respect to apparel wool traded.
Additional factors affecting global wool production, with
possible implications for the long-term viability of Australia's wool
industry, include:
- CIS: Significant exports of wool from the CIS group of countries
(including Russia, Kazakhstan and the Kyrghzic Republic) were a
temporary phenomenon in 1995 and 1996 which caused reduced demand for
Australian wool, particularly from China. However, stocks in those
countries are depleted and production has continued to plummet (176m.kg.
greasy in 1996, compared to 430m.kg. in 1990) so that future supplies
will be seasonal, comparatively small and poor quality.
- China: Wool production in China has continued to increase in recent
years, reaching around 300m.kg. greasy in 1996, but the increase has
occurred primarily in the medium to broad based categories. No forecasts
exist for future trends, but virtually all China's domestic production
is used by its expanding textile industry, a situation which is unlikely
to change.
- Local Processing: Combing mills in the other apparel wool exporting
countries are concerned that the contraction in domestic wool production
in their countries has caused them to obtain supplies from other
sources, including Australia, to maintain plant capacity utilisation.
Key Issues
- Wool production in all major exporting countries seems
unlikely to recover unless significant changes occur in the way in
which wool is produced and marketed to the global textile
industry.
- Wool production from alternative sources should not be an
important source of long-term competition for Australian wool.
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