Australian Wool Innovation Limited reported that in February, wool prices in Australia commenced a cyclical demand-driven upturn from the low point reached in late December 2005.
The lift in fine and broad wool prices started from normal levels for this stage of the price cycle; but for medium merino wool, prices are starting from a relatively higher base.
While the EMI had jumped substantially by mid-February compared to late December, the percentage gain in fine wool prices was more than double that for broader wools.
In February this year 19 micron wool prices had only been lower around a third of the time over the past 10 years - relatively normal for this stage of the price cycle.
It reflects a balance between large increases in supply over the past decade and increased consumer demand for soft, lightweight clothing with next to skin comfort.
The greater lift in fine wool prices has lifted the price premium for 19 micron wool over 22 micron wool.
Nevertheless, the premium is still modest compared with the average for the past 10 years. Further modest improvements in the fine wool premium can be expected for the balance of 2006.
Australian Wool Innovation Limited
marketing@alchempro.com
