Growing Chinese demand fuels record prices for wool in Australia

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Growing Chinese demand fuels record prices for wool in Australia

A growing demand in China is helping boost Australia’s wool industry resulting in record high wool prices for ranchers, but there are signs that the good times for the world’s largest wool producer may soon come to an end.

CGTN’S Greg Navarro explains.

On a rare rainy day in rural New South Wales, Edward Blomfield enlists some help to move things along. Thousands of sheep on his family farm are in the process of being sheared and their prized commodity is carefully sorted.

Australia’s wool industry is experiencing record prices, nearly double what they were just six years ago.

“Wool here in Australia has just reached the $20 a kilo mark which is just phenomenal and it has seen enormous growth over the last year or two,” said Fiona Simson, the President of Australia’s National Farmers Federation. “That is due in part to the take up of wool by China – China loves our wool and as such the demand from China has really been boosting our Aussie wool prices.”

Exports to China alone last year were worth almost $3 billion AUD and that is welcomed news for wool growers. 

“We can do all of the thing we need to do on a farm,” Katrina Blomfield, a wool grower. “Like put out our fertilizers, fix our fences, because a lot of that hasn’t happened the last 10 or 15 years very much.”

However, experts say the one thing that will have the greatest impact moving forward isn’t the increasing demand or shrinking supply, but the drought. 

All of New South Wales, which produces most of Australia’s wool, is in the midst of drought and creating conditions not seen here for nearly half-century.

“Everyone is suffering a terrible drought at the moment and all that wool prices are doing is paying for feed to keep the animals going,” Blomfield said, “I think a lot of people are yet to see a good profit where they can fix up infrastructure and buy new machinery and do those.”