What is threatening the future of the wool industry

There is a new threat for the wool industry and it is coming from a surprising quarter close to home.

The once proud and dominant Australian wool industry has yet another fight on its hands.

Leaders of the industry’s research, development and marketing organisation – Australian Wool Innovation – say competition from other commodities for land use is a very real threat to the future of wool growing in Australia.

AWI held its annual general meeting in Sydney today and chairman Jock Laurie said primary producers would continue to look for the most viable and profitable option for their country.

“In the end, wool growing is generally no problem and if we remain profitable we will keep people in the game,” Mr Laurie said.

“(If growers are not profitable) we will not be able to meet challenges of other commodities when it comes to utilising land.

“So everything we (AWI) do needs to be focused on delivering that profitability.”

Australian Wool Innovation chair Jock Laurie said competition from other commodities for land use was a threat to the future of wool in Australia.

The cost and availability of shearers was also having an impact on whether producers continued growing wool.

“Getting shearers is still a massive problem in parts of Australia and the cost of shearing – it has become a big cost in many sectors where people are seriously looking at whether it is worthwhile continuing,” Mr Laurie said.

AWI chief executive officer John Roberts said Australian wool was only 1 per cent of the global textile market.

“There are highly lucrative competing land uses out there, and Australian primary producers have choices and our global customers have fibre choices too,” Mr Roberts said,

“We have a product that can meet their needs and if we work together, we can get it right.”

It was a non-election year for AWI and there was no vote on the level of wool levies, which currently sit at 1.5 per cent of wool grower income.

The AWI budget for research, development and marketing was set against the benchmark Eastern Market Indicator of 1375c/kg, but the EMI is averaging 1320c/kg to date this season and closed this week at 1232c/kg.

Mr Roberts said despite increased production, revenue would be down.

AWI was already budgeting for a drawdown of its reserves for this financial year.