Market forces affecting wool

And the majority of wool-producing sheep in Australia are Merinos.

According to Australian Wool Innovation, the world's best Merino wool comes from Australia. Most of the world's superfine wool is produced by Australian woolgrowers who are known to employ sustainable farming practices.

Long term drought has affected flock numbers in recent years, but this year the Australian sheep flock is expected to be the biggest it has been in 15 years, growing to 78.85 million head.

Most flock recovery will occur in Victoria and NSW, according to Meat and Livestock Australia senior market information analyst, Ripley Atkinson.

He said other Australian states are also increasing their output.

There are some exterior drivers affecting Australia's wool production.

Wool Producers Australia CEO, Jo Hall, said the wool market was at the mercy of global forces.

Decline in New Zealand's flock size is expected to increase the Australian wool industry's market share.

Cessation of the Western Australian live sheep export market could affect the numbers of Merino sheep and wool produced in that state. Currently 84 per cent of breeding ewes in WA are Merinos, compared to 68pc nationally.

Globally, as the world's notice has shifted away from the pandemic, expenditure on wool apparel has lifted, positively affecting Australia's market.

Australian Wool Exchange data indicates wool prices have been relatively steady for the last 12 months after recovering from the steep decline experienced during 2020-2021.

In June 2023, the Western Market Indicator averaged 1317c/kg and the Western 19 Micron Price Guide averaged 1471c/kg.

"Unfortunately, when there is global economic uncertainty, we see the wool market take a hit," Ms Hall said.

"There was a positive trend in the market just prior to this year's winter recess."

Ms Hall said there were opportunities for market expansion for Australian wool, which would help lift domestic supply.

"While China remains our constant dominant export market for wool, there are other market opportunities starting to present themselves.

"Ratification of the free trade agreement with India late in 2022 has seen them become more active in the wool industry.

"The Indian textile industry is being reinvigorated, and they are seeking increased volumes of wool from Australia.

"Bangladesh is another potential market for Australian wool, with their textile industry seeking supply from markets with a strong focus on sustainability and environmental, social and governance (ESG) principles.

"These are principles that align well with Australian wool production.

"In 2023, we've also seen increased interest from Vietnam in early stage wool processing."

Although gross production was down, Australia's wool growers have still been focussing on fleece quality.

Australian Superfine Wool Growers Association president Mark Waters said Australian superfine woolgrowers produced a fibre that was recognised for its potential in the luxury apparel market, and carried a story about sustainability and traceability from some of the most picturesque farms in the southern hemisphere.

A couple of months ago an Australian-grown superfine skirted 9.4 micron fleece was judged and achieved a record-breaking score, underscoring the relevance of ultrafine wool growing in Australia.

David and Susan Rowbottom, of St Helens, Victoria, received the Zegna Vellus Aureum trophy for the seventh time, with a fleece from a three-year-old coated Rowensville Merino wether.

Ermenegildo Zegna Group director, Paolo Zegna, said the luxury suit brand wanted to work with the best wool growers in the world, who reflected consumer expectations in their production, including producing wool from non-mulesed sheep.

"We continue to align to the evolving cultural codes of the new generations and consumers more broadly," he said.