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Tuesday, August 11, 2015

Where does crossbred wool come from?

By Andrew Woods, ICS  |  Source: IWTO, FLA, Cape Wools, AWEX

Key points

  • Australia is a major contributor to crossbred wool, along with China, South America, Spain and perhaps the CIS (if its production numbers are genuine).
  • As crossbred wool is sourced from many regions, it is less of a hostage to changes in production in Australian than merino wool.
  • New Zealand is a small supplier of crossbred wool, with carpet wool its major output.


2015-08-11 World XB Wool Pdn FIG 1

Crossbred wool (in other parts of the world called medium wool, M2 and mid-micron) continues to trade at high price levels by the standards of history in both Australian and US dollar terms. Crossbred wool in this sense is defined as wool coming from non-merino sheep in the micron range of 20 to 32 microns. As Australia is one producer of crossbred wool among many, this article takes a quick look at where crossbred wool comes from around the world.

Figure 1 shows an estimate of world crossbred wool production by micron category for the 2013-14 season, in millions of clean kilograms. It is an estimate derived by combining an estimate of the average crossbred fibre diameter and volume for each country developing a fibre diameter distribution. The country totals are then added together for each micron category. The 26 to 28 micron categories are the main micron categories.

Figure 2 shows an estimate of regional crossbred wool production by micron for the 2013-14 season. For each micron category, the proportion of wool supplied by different regions is shown. Australia is a major provider of crossbred wool, along with China and in some categories South America. Production from the CIS*is shown to be a major contributor for the finer crossbred categories, with the proviso that CIS data is suspect.

The Chinese clip is harvested mid-year (summer) and tends to be delivered in the September quarter. As such, the influence of this domestic clip (for many mills) is heightened early in the selling season.  As with the CIS data, there are some doubts as to the quality of the Chinese wool production data.

A range of sources reduces the influence that changes to production in any of the individual regions can have on the market through supply. As mentioned in a previous Mecardo article on world merino production, detailed supply information on wool production, which includes volumes by micron category, is limited to Australia, South Africa and Argentina. The International Wool Textile Organisation (www.iwto.org) does the best job of collating wool production data in the industry, but its statistics tend to be limited to gross production volumes by country.

*CIS: Commonwealth of Independent States, includes Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.

What does this mean?

The analysis of crossbred wool production (in relation to supply and price) requires international data. Given the strength of the crossbred wool market, it is of interest to understand what effect changes in supply are havening on this market. The limited data available about crossbred wool production limits such analysis, and requires some modelling to fill the gaps in information. Perhaps AWI might consider allocating some funds to monitoring crossbred supplies around the world.

Mecardo information is provided to assist in your marketing decisions. It contains a range of data and views on the current market. It is not intended to constitute advice for a specific purpose. Before taking any action in relation to information contained within this report, you should seek advice from a qualified professional. The information is obtained from a variety of sources and neither Mecardo nor Ag Concepts Advisory will be held liable for any loss or damage whatsoever that may arise from the use of information or for any error or mis-statement contained in this report. 

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