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Fate of wool price in the hands of China
31 Mar 2003
Wool prices in Australia may continue to decline in the second quarter of 2003, as global concerns about the Iraq war, unemployment and rising energy bills cut into consumer purchases. US wool prices for the March 31 quarter fell 8.9 per cent, coming down from a 14-year high reached in October 2002.
Itochu Wool says there's very little demand, with yarn and fabric makers and clothing retailers at a standstill.
In 2002, prices soared as Australia's drought reduced its sheep flock and concerns were raised about a wool shortage. But Macquarie Bank says that although supplies are low, so is demand, which is why prices have fallen so quickly.
On the Sydney Futures Exchange, wool futures prices have fallen more than 10 per cent so far in 2003. On March 28, medium wool for June delivery fell 0.8 per cent, or 10 cents, to $11.83.
Wesfarmers Landmark says much will depend on the Chinese market and how it holds up, given the economic uncertainty elsewhere in the world.
Sydney Morning Herald, 31/3/03.
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