THE current push to develop Vietnam as a major new global wool processor won't have much impact on Australia's current heavy reliance on Chinese mills.
That was the message given to last week's wool and sheepmeat session at the Outlook conference in Canberra by Jimmy Jackson, Australian Wool Innovation's (AWI) general manager for product development and commercialisation.
He said "five or 10" Vietnams would be needed to replace China's almost total domination of the Australian wool clip.
China now buys about 80 per cent of Australia's annual wool production which has created nervousness among both producers and the AWI that too many of our eggs are in the one basket.
Largely in response to those fears, AWI launched its Out of Vietnam project in June 2012, to develop a new cheap processor of wool.
Mr Jackson said 53 manufacturing partners were now on board in Vietnam, many more than the original target of 12.
About 20 of them were now "up to speed" with all the modern technicalities and technologies needed to manufacture high-quality apparel from Australian wool.
But Mr Jackson said despite this success, Vietnam on its own wouldn't become an alternative to China's wool supply chain where growing wage rises were driving up production costs.
"China is no longer a cheap processor of wool," Mr Jackson said.
In fact, the price of Italian woollen yarn was now on a par with Chinese product, he said.
That statement prompted veteran NSW farm consultant and Merino breeder, Graham Peart, to ask Mr Jackson why moves weren't under way to revive Italy's once renowned wool processing sector.
Mr Jackson said much of Italy's wool processing equipment had been sold to overseas buyers, skilled workers had been lost from the industry and the former centres of its wool textile industry, such as Biella in the country's north, were now "dead towns".
Although unemployment was high in countries like Spain, Mr Jackson said wool processing shifted to the cheapest processor, which for Europe was Bulgaria and Romania.
On a positive note, Mr Jackson said rising incomes in China would boost demand for luxury items such as premium-quality woollen garments.