Tasmanian wool producers face decline in fine wool premiums

YarnsandFibers News Bureau 2014-11-25 14:00:00 – Tasmania

Tasmania has been home to the best-quality wool in the world. Merino sheep have been bred in Tasmania for over 180 years. It is also the sheep’s living conditions which are responsible for the top-quality wool. Tasmania provides the greatest possible diversity. But fine wool producers in Tasmania have been seeing a steady decline in premiums falling by 96 percent since 2001.

Surplus building on the market after years of a push to 'get fine or get out' have been the main reason of the declining returns for fine wool.

Returning to Tasmania after working as a wool export trader on the mainland, Rob Calvert says that the international market is pushing for a shift away from fine wool.

Medium wool is selling very well in comparison to fine wool. In the last 15 to 20 years there was a catch cry to 'go fine or get out'.

The result of that is there has been a glut of fine wool, coupled with global fashions changing ... led to less demand for fine wool when there is the greatest supply ever had.

Rabobank has looked at the decline in fine wool premiums as a 'perfect storm' of external factors leading to the loss of value in the industry.

The recent report suggests that the centralisation of wool processing in China, global insecurity as a result of the global financial crisis and a shrinking market for fine wool created an automatic decline in demand during the 'go fine' expansion.

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