Trading prices for Japanese worsted yarn rose significantly since the middle of 2006 and by October this year it had reached a two year high.
The benchmark quotation rate by Nagoyan yarn traders in October was the highest recorded since October 2004.
The price gains have been attributed to a firming supply/demand position for Japanese worsted yarn. After years of restructuring and downsizing of the domestic wool spinning industry, the production of worsted yarn has been cut by over 80 percent in the last ten years.
However, an increase in yarn imports, primarily from China, has offset some of this decline in domestic production.
Imported yarn prices have not been immune from price increases, with the average price of worsted yarn imported from China rising moderately during the January to September 2006 period compared to the same period the previous year.
The lift in yarn prices has already affected some fabric prices in Japan. One of the largest Japanese integrated wool spinner-weavers announced a rise in their wool-polyester blend fabrics for school uniforms.
Higher raw material costs and processing fees from dyers and finishers have forced them to lift their prices. Rising fabric prices are a risk for pipeline wool demand in the 2007/08 Autumn/Winter season.
Australian Wool Innovation Limited
marketing@alchempro.com
