Last week I returned from the 86th IWTO Conference, this year held in Yorkshire in northern England. The conference this year was titled “Wool in the digital age” and while there were many different themes to this, I would like to focus on one part that I found particularly interesting.
Much of the wool we produce ends up in the apparel industry; it is the apparel industry that I would like to talk about.
Maybe you have heard of the term fast fashion and the subsequent phrase; slowing down fast fashion? If you are anything like me, you have probably heard these terms but don’t necessarily have an understanding of what they mean outside the obvious. So firstly some facts on the world apparel market and the role natural fibres can play in reversing some of the alarming statistics.
- The apparel industry is now the 2nd largest polluting industry in the world behind the oil industry.
- In the UK alone, 2 million tonnes of garments are purchased each year, while 1 million tonnes of old garments are discarded with 50% ending up in landfill.
- In the US on average each consumer purchases 75 new garments per year compared with 25 in 1960.
So what relevance is there here for the wool industry? Most of these products I refer to are oil based, polyester garments that are produced and subsequently sold cheaply as a way of keeping up with this fast fashion movement.
As consumers become more aware of the sustainability of the products they purchase in an attempt to slow down fast fashion they will be more focused on selecting better value for money garments. These may cost more per item, but treated correctly can last for years, therefore costing far less per use.
None of this even takes into account the life cycle of man-made versus natural fibres post wearing.
There is a number of interesting videos available, one in particular is put together by Alex James title Slowing Down Fast Fashion and can be found online.
To the wool market, sales opened on Wednesday this week with all three centres selling. Early quotes suggest the market has levelled after last Thursday’s correction with only minor movements either way across the whole spectrum. At this stage next week we see 39,000 bales rostered before contracting to low 30,000’s for the following weeks.
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This week saw 40,000 bales offered nationally selling on Wednesday and Thursday in all three selling centers. The market opened strongly on the reduced volume with all merino categories rallying between 30 and 60 cents clean in early trade. Better types were most affected with high nkt, low vm very keenly sought. This was particularly apparent in the skirtings, with the Tasmanian offering selling exceptionally well, because of the light fault. Important to note the xbreds also firmed slightly in a small offering. Interestingly one large Tasmanian xbred clip was bought heavily by one of our Tasmanian origin brand partners, for a 100% Tasmanian order. Great to see the work we’re doing developing Tasmanian Merino is now carrying across into other types.
Supply drops off pretty quickly from here on in with offerings in the mid 30,000 bales, this should help underpin any downside in the short term. Plus the fact that a lot of the major exporters are on the right side of the market, i.e many have been trading profitably during the recent rally. Making up for those that were caught by the rise earlier in the season and lost a bit of money. From a grower’s point of view we need the exporters trading profitably to give them confidence to continue selling into this rising market and diminishing supply, which should again limit any downside.
I’m writing this report from the 86th International Woollen Textile Organisation (IWTO) conference in Harrogate, UK. With around 250 participants from every country involved in the wool trade. The mood is positive from everyone I’ve spoken to which is great. There is a lot of talk about the market into the future with several different opinions. Most feel it should remain strong for the short term, but that growers should still sell into this market straight away, rather than holding out for higher prices.
It’s wonderful to be involved in this event and to engage with people from around the world that share the common theme that they love this fiber and this industry and are glad it is making somewhat of a resurgence. If nothing else it demonstrates that no matter what field you want to work in there’s something for everyone in the wool industry; Design, finance, manufacturing, farming, marketing, media, economics and on it goes.
We’re hoping to consolidate our work around Tasmanian Merino during and after the conference and we look forward to reporting back to Tassie growers when we return.
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There was a lot of anticipation about how the market would open up this week after the traditional one week Easter recess.
Early forecasts showed a sharp jump in roster volumes with close to 60,000 bales initially estimated. In today’s terms 60,000 bales is a very large volume week and when we consider that every merino bale is worth 50% more than twelve months ago, it was going to stretch the trades ability to fund the weeks sales. Thankfully we didn’t see the full 60,000 bales come to market, with final numbers coming in under 55,000 which no doubt helped with the sentiment as buyers sat down to sales in all three centres on Wednesday.
Unfortunately the slightly negative tone that was circulating during the break couldn’t be fully ignored and the market opened up cheaper, with 18.5 to 23 micron most affected. These mid microns lost between 15 and 30 cents for the day, while both finer merino types and crossbreds were quoted unchanged.
Looking at the market in a little more depth and we can see some changes in the offering beginning to take effect, in particular the vegetable matter content after the good spring and summer experienced up and down the eastern seaboard. Merino fleece in the Northern region is averaging nearly 2.5% VM, while their skirtings are closer to 8%. The same is appearing in the South, albeit not quite as dramatic at 2% and 6.5% respectively. This bodes well for our FNF (free near free) Tasmanian clip as it begins to come on line.
On another note, the entry forms for this year’s Campbell Town Show are out and can be found on their website. Why not take the time to enter some fleeces in this year’s show.
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I thought I would commence this week’s column discussing the abrupt correction we saw on Wednesday last week. After a long period of gains week after week, mainly in the finer microns and mainly driven by China. 21.0 and finer retraced between 50 and 100 cents with medium wools least affected. On face value it looked a lot worse than it was. As we’ve said many times when the market is particularly strong the poorer testing wools are discounted far less than they should be. Last week saw some of the large Chinese indent prices pulled back, thus the lower end of the clip returned to more appropriate discounts, the issue is that at this time of year the poorer end makes up a large percentage of the offering hence it heavily influences the micron price guides. On top of this the market retraced so quickly that it was particularly difficult for buyers to adjust their limits on the run, so many over corrected. The positive thing is that wool was sold the night after the sale, indents also reentered the market and merinos firmed slightly on the second day.
It was great to see that that strength carried into early trade this week with strong gains across all merino categories. 18’s closed in Melbourne on Wednesday at 2119 cents clean or only 30 cents behind the peak of two weeks ago. 21’s were particularly strong in early trade jumping over 60 cents to 1439 clean and cardings and xbreds firmed as well.
To be honest last week’s hiccup was a pretty good result for Tasmania’s wool growers, we needed a reality check, and much better that happens in a week when we’re not selling. Some of the prices achieved for better Tasmanian merinos this week were outstanding, further proof that quality fine wool is still keenly sought.
Sales will be in recess for 1 week next week, then resuming on the Wednesday after Anzac day.
Finally I would like to thank the readers that got in touch with us after the call was put out for Tasmanian Non Mulesed, demand is still strong here, so if you would like further information please don’t hesitate to let us know on firstname.lastname@example.org