Australia is mulling processing wool domestically. With over 90 per cent of Australia’s greasy wool exported to China, supply chain security is key for Australia’s wool future, says a Queensl and contry life report. China is a dominant player in early stage processing and can very much control that market. So there is an increasing appetite to do more processing in Australi, but money is an issue. In early October production in wool conversion plants were reduced by up to 40 per cent resulting in a sharp fall in the Australian wool market.

Those in the industry are now hoping the situation in China will encourage investment in more plants in Australia. The aim is to capture three value-adding steps in wool processing - scouring and carbonising, top-making, and yarn spinning and dying. This would need around 10 million kg of greasy wool a year, which can be bought on the Australian market. Last year, the Blackall-Tambo Regional Council commissioned economic consultants AEC to conduct a feasibility study into the proposed Blackall facility. It found it would create 88 full-time jobs during construction and 812 full-time jobs in the region once operational, including 270 directly associated with the scour. It also found the operation would generate $116.3 million in gross regional product per year.

As per Queensland Wool Processors, chaired by Central Queensland University chancellor John Abbott AM, it is using a feasibility study as the basis for claims it would capture three value-adding steps in wool processing - scouring and carbonising, top-making, and yarn spinning and dying.

In reality the idea of processing domestically has simply been a reaction to processing becoming more expensive in China. In the 80s there were many processors in Australia but eventually they got forced out because of competitive pressure from China. They couldn't compete with cheap Chinese labor and eventually China took over the game. Today, things have changed and China’s labor costs have risen and continue to rise.