Project shows potential to broaden markets for wool

China takes 80 per cent of Australian wool, but a major study has found there is opportunity to look to other countries and our own backyard for processing.

A major study of wool processing world wide has shown the industry could look to countries other than China for Australian fibre.

The study, initiated by the industry’s peak body WoolProducers Australia and completed by Deloitte Access Economics, has shown early stage processing could be completed in Vietnam, India and Bangladesh.

And there is also a case for processing wool domestically in Australia, with the optimum site in Melbourne.

The best way forward to steer some supply away from China, the report found, was to establish a Wool Trade Policy Office.

The office would push the findings from the report to ensure that action was taken both domestically and internationally.

WoolProducers Australia general manager Adam Dawes said supply chain diversification and expansion “is in everyone’s interest but it’s no one’s responsibility”.

“With Australian production of 80 per cent of the world’s apparel wool, we need to continue investment in this space,” Mr Dawes said.

WPA has called on the Federal Government to back the wool trade policy program for the next three years to expand Australia’s wool trade and to mitigate trade risk.

Currently, China buys 80 per cent of all wool grown in the nation.

“To future proof the Australian wool industry and the prosperity of the rural and regional communities it supports, this work must be supported and sustained by trade policy activities in the near term years to ensure that the opportunities identified materialise into tangible actions.”

“Such a program would seek to commence implementation of the findings of the business case and roadmaps (for international work) to deliver improvement in supply chain trade risk exposure.”

Those opportunities include increasing early stage processing in Vietnam, where costs of production are considered competitive to China; helping to boost yarn sales from India which will drive demand for wool, and boosting knowledge of wool in Bangladesh, which is the second biggest textile and apparel exporter in the world.

The work was driven by WPA and was financially backed by the federal government though its Agricultural Trade and Market Access Co-operative program.