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The National Council of Wool Selling Brokers of Australia Inc
Unit 9
42-46 Vella Drive
Sunshine West Vic 3020
NEWSLETTER
Phone: 03 9311 0152
Fax: 03 9311 0138
E-mail: [email protected]
10th April 2015
2015/13
From the desk of Chris Wilcox, Executive Director
 Improving sentiment about economic conditions and consumer confidence
 Australian wool exports lift in February
 Raw wool demand remains patchy
 Update on the Wool Selling Systems Review
 Upcoming events
At the start of 2015 there was increasingly negative sentiment about many of the major economies, with
the exception of the US which was doing well. There were fears that these economies would turn down
again due to the fall in oil prices and subsequent deflation, as well as uncertainty about Greece which
would cause a break-up of the European Union. These fears have waned and economic prospects have
improved in most of these countries, again with the exception of the US. In the US, the economy is
predicted to continue growing, but perhaps at a slower pace than expected at the start of the year.
In spite of this better sentiment, the International Monetary Fund warned this week that we should expect
slower economic output growth in the medium term from both advanced and emerging market
economies than seen in the past. As well, the future medium-term economic growth rate will be lower
than expected even three years ago and lower than expected prior to the Global Financial Crisis. The main
reasons for this is the combination of aging populations, weaker investment and the slow increase in
capital growth from current rates as output and investment recover from the crisis.
The good news in the shorter term is that the recent improvement in prospects for the EU economies has
resulted in a sharp increase in consumer confidence in the EU in March to the highest levels in 5 years.
Consumer confidence in China also reached the highest level since early 2008 as economic prospects
improve. In the US, consumer confidence levels in March were close to the five year highs recorded in
January. The situation is less positive in Japan and South Korea. In Japan, consumer confidence has lifted
in the past four months but are a little below the levels seen in mid-2014. In contrast to the improvement
elsewhere, consumers in South Korea are becoming less confident. Even so, the much better consumer
confidence levels in most of the major wool consuming countries is encouraging for retail sales and,
hopefully, better orders through the wool textile industry and back to raw wool demand.
After declining in January, Australia’s wool exports rebounded in February, lifting by 19% in volume terms
and 21% in value terms for the month, according to data from the Australian Bureau of Statistics released
this week. The increase was driven by a jump in exports to China (up 28% and 32% in volume and value
terms respectively for the month). There were also solid increases in exports to other countries in East and
South-East Asia, including a 61% lift in export volumes to South Korea and an 18% increase in exports to
Malaysia, as well as increases in exports to Taiwan, Japan and Thailand.
Disappointingly, exports to India and to the major European countries declined. Exports to India fell by 13%
in volume terms, while exports to Italy and the Czech Republic declined by 8% and 20% respectively.
Rounding out the top ten export destinations, exports to Egypt also fell, by 12% in volume terms.
For the season to February, exports were 1.8% higher in volume terms than for the same period in 2013/14,
but 2% lower in value terms. For the top 10 export destinations, export volumes to China and the other
countries in East and South-East Asia were higher than a year earlier, with exports to Thailand up by 200%.
As with the February monthly results, exports to the European countries and to India were down.
NCWSBA Newsletter 2015/13
10 April 2015
2
The latest data on raw wool exports from the five major exporting countries is rather mixed, as can be
seen in the two Charts of the Week (below). These charts show the exports from the five major wool
exporting countries and the imports of wool by the major processing countries for the 2014/15 season to
February.
As the first chart shows, exports from Australia, New Zealand and Argentina were up by between 1% and
2% for the season. Exports from both Australia and New Zealand jumped in February, which put the seasonto-date change into positive territory. In contrast to these increases, exports from both South Africa and
Uruguay were well down for the season, by 10% and 11%. Overall, exports from the five major exporting
countries was very slightly lower in the July to February period.
Imports by most of the major wool processing countries have declined this season, as shown in the second
chart. The sole exception shown in the chart is China, the largest export destination for wool. Exports to
China from the five major exporting countries was 5% higher for the 2014/15 season to date, helped by a
30% lift in February. Exports to Malaysia and other countries in East and South-East Asia have increased,
but these increases have not been enough to offset declines in exports to other destinations in the
Americas and the Middle East. As a result, exports to ‘Other’ countries are slightly lower than a year earlier.
Exports to Europe, the second largest destination for raw wool exports, fell by 13% for the 2014/15 to
February as a result of declines in exports to Italy, Germany, the Czech Republic and the United Kingdom.
After strong gains in the first half of 2014, raw wool exports to India from the large exporting countries
have also dropped back this season, by 12%.
While the improvement in exports to China and other countries in East and South-East Asia is encouraging,
we need to see improved demand from other countries, notably European countries, to consolidate and
reinforce the recent improvements in raw wool demand.
CHART OF THE WEEK#1
Wool Exports by the Major Exporting Countries
Financial Year to February
CHART OF THE WEEK#2
Wool Imports by Major Processing Countries
Financial Year to February
-0.2%
Total
450
mkg greasy equiv.
-0.2%
400
2009/10
2010/11
2011/12
350
2012/13
2013/14
2014/15
-1%
Other
-13%
Other Europe
300
-6%
Czech Republic
250
-31%
+2%
Germany
200
-6%
2014/15
2013/14
2012/13
2011/12
2010/11
2009/10
Italy
150
+1%
-12%
100
India
50
+2%
-10%
-11%
+5%
China
0
Australia
New Zealand
Argentina
South Africa
Uruguay
Total
0
25 50 75 100 125 150 175 200 225 250 275 300 325 350 375 400 425 450
mkg greasy equiv.
Source: Australian Bureau of Statistics, FLA, SUL, Capewools, NZ Meat and Wool
Note:
From the five major exporting countries (Australia, New Zealand, Argentina, Uruguay and South Africa
Source: Australian Bureau of Statistics, FLA, SUL, Capewools, NZ Meat and Wool
The Review Panel Discussion Paper for the Wool Selling Systems Review, which was due at the end of
April, has been pushed back. According to the WSSR website (see http://www.wool.com/about-awi/howwe-consult/wool-selling-systems-review/), the Discussion Paper will now be released at the end of June
and the One-day Stakeholder Workshop to be held at the end of July.
OTHER INDUSTRY EVENTS
The Australian Wool Production Forecasting
Committee will meet on Wednesday, 15th April.
The 2015 IWTO Congress will be held in
Zhangjiagang, China, on Monday 18th to
Wednesday 20th May 2015. Click here to register.
The 2015 Wool Week, which includes the
NCWSBA Annual General Meeting, will be held on
27th and 28th August 2015.
WOOL SALES WEEK BEGINNING 13th APRIL 2015 – week 42
(roster as at 7/4/2015)
Sydney
Wed, 15th Apr; Thurs, 16th Apr
15,291 bales
Melbourne
Tues, 14th Apr, Wed, 15th Apr; Thurs, 16th Apr 28,911 bales
Fremantle
Wed, 15th Apr; Thurs 16th Apr
13,089 bales
Issues for inclusion in the Weekly Newsletter? Email [email protected] or phone 0419344259.
Information in the Weekly Newsletter is intended to provide general information only and is not intended to constitute advice for a specific purpose
NCWSBA Newsletter 2015/13
10 April 2015