Australian Wool Companies Are Feeling The Throes Of China'S Domestic Credit Squeeze.

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< p > Australia < a href= "//www.sjfzxm.com/news/index_c.asp" > wool enterprise < /a > is feeling the pains brought by China's domestic credit squeeze.

The industry has a complex feeling for this large customer who buys over 70% of wool products. It is more urgent to explore and think about the development direction of local wool industry.

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P is one of the largest traders and exporters of fat wool and defatted wool in Australia. Its trading manager, Lamb (JoshLamb), recently attended a forum in Gunning, New South Wales town. She pointed out that China is now proving to be the best partner of the wool industry. But it also cautioned that the majority of Australian wool production is exported to China every year. Too much reliance on a single market is not conducive to the development of the industry. "(Techwool)

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< p > the theme of this forum is "insight into sheep and beef market and production system".

In explaining how to ensure the long-term benefits of the wool industry, lamb lists 3 main problems: the lack of high-quality fine wool, the lack of new practitioners and the credit crunch in China.

Two of these problems may not be resolved - the lack of market demand for fine wool and the entry of new operators.

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< p > lamb said that the demand structure of Chinese wool products has great influence on Australian wool production.

China's demand for wool is very important for Australian wool producers and exporters. But Chinese importers usually buy 21 micron fine wool, and few choose to buy 18.5 micron fine wool with better texture.

To a certain extent, this led to the decline of the fine wool market.

In other countries and regions such as India and Europe, the local fine wool processing industry is booming, but demand in these countries and regions is small, which can not meet the excess capacity of the Australian wool industry.

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Less than 25 years ago, the wool industry was controlled by Japanese and European processing and trading companies, but most of the companies are no longer there, P reported.

By the end of June this year, 72% of the gross output of Australian wool has been exported to China.

But the slow growth of China's economy has also depressed the buyers and processors of wool.

Lamb said that, affected by low returns, many Incorporated Company models of wool buyers and traders have dropped out of the market.

According to FarmWeekly quoted lamb as saying, "only 20 of the top companies in the wool industry are 1/4."

"Family traders still tend to stick to the wool industry.

If Incorporated Company traders intend to invest 200 million or 300 million Australian dollars in the wool trade, they need to earn more profits than 1% (the average rate of return of the wool industry in the past five or six years), lamb explained.

"This is not sustainable. It is not only sustainable in this industry, but also unsustainable from a commercial perspective."

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< p > Lam, frankly speaking, the excessive supply of fine wool in the market is due to the seasonal conditions of drying rather than the traditional form of low micron wool.

Therefore, the only way to solve the current weak demand is to reduce and digest the amount of fine wool produced by drought in the market as soon as possible, but this will take time.

Lamb said he hoped that after ten years, China's imports would only account for 50% of the total output of Australian wool, because this means that another 50% of the wool was exported to other countries to avoid over reliance on the Chinese market - "this is the reality we must face."

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< p > Australian agricultural resources economy and Technology Bureau (ABARES) predicts that China's a href= "//www.sjfzxm.com/news/index_s.asp" > clothing retailing < /a > sales growth is slowing down. The garment industry in the main developed economies is constantly changing to produce synthetic fiber garments, which is expected to make the market demand for fine wool.

Although prices will rise, Australian wool production will be further reduced in the coming year.

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