For herders who raise sheep in New Zealand, the past six months should be a nightmare. They watched as large sums of wool were sheared from their own sheep without sales – between December 2016 and January 2017, New Zealand wool exports fell by 25 per cent. Then, in February and March, exports fell by another 10 percent.
"We saw a rebound in demand 2 months ago, so we thought there was hope for the industry at one point," John Dawson, CEO of The New Zealand Wool Service International, said in an interview with New Zealand media Outlets New Zealand, "but after that, demand died completely." ”
Initially, new Zealand wool industry practitioners generally believed that the decline in wool exports was only one of the specific manifestations of the weakening of the country's overall exports caused by Brexit and the strengthening of New Zealand's currency after Trump was elected us as us president. As late as March 2016, Andrew Burtt, chief economist at Beef and Lamb New Zealand, was making this point during an interview with the media. However, at the time, Burtt also pointed out another factor that affected wool exports in his view - changes in the Chinese market.
According to the New Zealand Wool Service International Association, 60% of New Zealand's wool has always been exported to China. But that number has slipped significantly since Last December, and now demand from the Chinese market accounts for only 30% of New Zealand's total wool production.
"We went to China several times hoping to find the crux of the problem, and finally we found that the Chinese fashion industry is changing, and they now prefer better quality and softer wool." ”
If you see how herders in neighbouring Australia have been so excited lately to raise sheep and shear sheep, you know that Downson's observations are very accurate.
Unlike 70% of wool produced in New Zealand, which is coarse, in Australia, most wool is fine and soft merino wool. This wool has a higher price and has been a small supply product for a long time in the past. This directly determines that only a small number of stable herders in Australia will join the ranks of sheep, and even if they raise sheep, the frequency of their sheep shearing does not need to be very high, most people are sheared once a year, and those who are slightly more diligent are also sheared three times a year.
But a flood of new orders from China has brought a flashpoint to the already calm market, with the price of Australian wool rising to an all-time high in short supply – a bale of wool can now sell for $3,000. A sheep farmer with 35 years of experience also said in an interview with the ABC Agriculture Channel that the heat of the entire industry is now unheard of in his life.
"We have 3,500 sheep now, last year I only had 3,000 sheep, and next year I think that number can go up to 4,000." He added.
At the same time, Australia's sheep shearing industry has also ushered in a good day. Because in order to catch up with the good time of high prices, many herders will shear sheep in advance and increase the frequency of sheep shearing. According to the above-mentioned farmers, many herders have also begun to experiment with the new model of two cuts a year. This gives shearers more job opportunities.
The rise and fall of the wool market in Australia and New Zealand has witnessed the surge of consumption upgrading in China. When we reported that the International Wool Bureau cooperated with six Chinese designers to promote "cool wool" during the Spring/Summer Shanghai Fashion Week in 2017, we also mentioned that in 2014, China had become the world's largest wool processing and consumer, but most customers' demand for wool was still functional-oriented, mainly to keep warm. With brands such as Uniqlo increasingly formulating merino wool and changing the concept of Chinese consumers, customer demand for wool has gradually advanced.
This is certainly not good news for the New Zealand wool industry. Now the industry has begun to seek a change.
"There will be certain land use restrictions in New Zealand that make it difficult for us to raise merino wool breeds on a large scale," Dawson said, "but you will still see that we have made a certain degree of transformation, and we believe that by the end of the year it will be better." ”