Home > Rabobank announce ‘Wool is back in fashion’

Rabobank announce ‘Wool is back in fashion’

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article image Rabobank analyst, Airlie Hoskins.

A recent report written by Rabobank analyst Airlie Hoskins suggests that the growing popularity in wool has seen demand for the agricultural product increase, restoring the supply-demand balance and even leaning in favour of demand.

Hoskins explains that a decreased global level of wool supply and new demand drivers have led to a closer market and increased competition for accessible supplies.

Agribusiness banking specialist Rabobank believes that higher  than average wool prices in the past year have been attributed to the following:

  • Changing dynamics in global wool consumption
  • Traditionally low wool supplies;and
  • Improved price competition between man-made fibres and cotton.

The report suggests that the incentive to maintain sheep stock and continue wool production has declined in Australia due a reduction in global demand, severe drought and more advantageous investment from alternative agricultural enterprises. 

China remains the number one importer of Australian wool with its purchases significantly increasing over the past two decades. 

Rabobank predicts that low wool supplies will continue to sustain the Australian market and take it forward, although the strong Australian dollar may prevent farmers from ‘reaping’ the full benefits.  

For the full report please visit the Rabobank website.

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