Australian wool prices have fallen from the record highs reached last year. Australia's wool industry is hoping trade tensions between the US and China are resolved soon as low consumer confidence has forced prices to their lowest level in 18 months. Australia's wool price index, the Eastern Market Indicator (EMI), finished the 2018/2019 selling year last week at 1,715 cents per kilogram — 51 cents less than the previous week, 172 cents less than the previous month, and 341 cents less than the end of the 2017/2018 selling year. The monthly drop was reportedly the largest seen since Australia's wool market was deregulated in 1991. Fox and Lillie Rural wool trader Wes McNaughton said the recent drop in the market was "not normal" and was driven by uncertainty surrounding trade. "Roughly 80 per cent of Australian wool is sold to China, and consumer confidence has disappeared with this trade war between China and America," Mr McNaughton said. Donald Trump and Chinese President Xi Jinping met in Osaka at the weekend during the G20 conference, and the US President said he would not introduce any new tariffs while talks between the two countries continued. But this year traders have reported a slow-down in orders and a softening in prices, largely because of escalating tension between the United States and China. Chris Wilcox from the National Council of Wool Selling Brokers of Australia said the drop in orders had led to stocks of wool piling up in processing plants in China. "The US retailers are very cautious and they're reluctant to place orders for yarn and fabric, and therefore as a result that's having a knock-on effect on Chinese mills," he told the Victorian Country Hour. "We're also seeing stocks in the textile industry get to difficult levels … excess stock built up as a result of anticipated orders that haven't come through." Melbourne-based Fox and Lillie Exports' merino trading manager Peter Maher said there had been a noticeable drop-off in customer inquiries in recent months. "It's hard to get any inquiries from our customers — there was a period there for two or three weeks where China didn't give us any indication," Mr Maher said. "We'd send prices out to our customers and we would get nothing back." Steven Read, the CEO of Adelaide-based processor and exporter Michell Wool, said fashion labels and garment manufacturers had reported slowing sales. "The trade tensions, the tweets that go backwards and forwards, and the reality of the duties being charged, have taken the wind out of the sails of consumers," Mr Read said. But despite recent drops in the market, prices are still at historically high levels. Wool prices reached record highs last year, peaking at 2,116 cents per kilogram in August. "Growers are generally quite happy with the prices," Mr Mahar said. "The current price [$17/kg] could drift lower but even if it did, it still would be good numbers from where we were three or four years ago." Mr McNaughton sai
Australian wool prices have fallen from the record highs reached last year. Australia's wool industry is hoping trade tensions between the US and China are resolved soon as low consumer confidence has forced prices to their lowest level in 18 months. Australia's wool price index, the Eastern Market Indicator (EMI), finished the 2018/2019 selling year last week at 1,715 cents per kilogram — 51 cents less than the previous week, 172 cents less than the previous month, and 341 cents less than the end of the 2017/2018 selling year. The monthly drop was reportedly the largest seen since Australia's wool market was deregulated in 1991. Fox and Lillie Rural wool trader Wes McNaughton said the recent drop in the market was "not normal" and was driven by uncertainty surrounding trade. "Roughly 80 per cent of Australian wool is sold to China, and consumer confidence has disappeared with this trade war between China and America," Mr McNaughton said. Donald Trump and Chinese President Xi Jinping met in Osaka at the weekend during the G20 conference, and the US President said he would not introduce any new tariffs while talks between the two countries continued. But this year traders have reported a slow-down in orders and a softening in prices, largely because of escalating tension between the United States and China. Chris Wilcox from the National Council of Wool Selling Brokers of Australia said the drop in orders had led to stocks of wool piling up in processing plants in China. "The US retailers are very cautious and they're reluctant to place orders for yarn and fabric, and therefore as a result that's having a knock-on effect on Chinese mills," he told the Victorian Country Hour. "We're also seeing stocks in the textile industry get to difficult levels … excess stock built up as a result of anticipated orders that haven't come through." Melbourne-based Fox and Lillie Exports' merino trading manager Peter Maher said there had been a noticeable drop-off in customer inquiries in recent months. "It's hard to get any inquiries from our customers — there was a period there for two or three weeks where China didn't give us any indication," Mr Maher said. "We'd send prices out to our customers and we would get nothing back." Steven Read, the CEO of Adelaide-based processor and exporter Michell Wool, said fashion labels and garment manufacturers had reported slowing sales. "The trade tensions, the tweets that go backwards and forwards, and the reality of the duties being charged, have taken the wind out of the sails of consumers," Mr Read said. But despite recent drops in the market, prices are still at historically high levels. Wool prices reached record highs last year, peaking at 2,116 cents per kilogram in August. "Growers are generally quite happy with the prices," Mr Mahar said. "The current price [$17/kg] could drift lower but even if it did, it still would be good numbers from where we were three or four years ago." Mr McNaughton sai
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