2020, a year to remember for the wool industry

A year the wool industry will remember

2020 was a shock for the wool industry with COVID-19 disrupting the predicted recovery from prolonged drought, decreased demand and large correction in product prices. With key markets in China and Northern Europe along with global supply chains in flux, the market didn’t dip as low a expected. It is good to see the resilience of the wool industry, which is expected to steadily recover in the first half of 2021.

Recovery in 2021

For most of 2020 the wool market was relying on China, as the country accounted for 82% of the value of wool exports through the year. Farmers can be thankful for the Australian currency firming up showing a clear sign of hope. Although 2020 was an extremely challenging year, Rural Bank predicts the Australian wool market to slowly recover in the first half of 2021.

The price for wool is forecast to average 1120 cents per kilogram, however, the extent and speed of recovery in wool prices will depend heavily on how fast retail demand is restored in US and Europe which have had weakened demands for woollen apparel. However, with China already showing an increase in market demand, things are looking positive for prices to trend along the upper forecast range and return above 1300c/kg by June 2021.

Broadening trade

Rural Bank has stated that although trade tensions between China and Australia have escalated in recent months, the signing of the Regional Comprehensive Economic Partnership (RCEP) is predicted to open opportunities for Australia to broaden and stabilise economic ties with alternative markets. The partnership is likely to provide non-tariff advances between 15 countries, with our two largest agricultural export markets, China and Japan being signatories in the deal.

Central Agricultural is pleased to be working with leading fit out companies in the design and construction of shearing sheds according to improved safety practices. Find out about the new best practice for shearing sheds here which showcases one of our most recent collaborations in Central Victoria.

Information credits: sheepcentral.com, farmonline.com.au

Photography location: Coliban Estate, Redesdale Victoria