Prices for Australian wool have been at a record high. Australian wool prices increased by almost 30 per cent compared to last year. Its being driven by China’s unstoppable appetite for Merino wool. China’s wool imports increased 4.5 per cent from the previous year.

Domestic consumption of woolen products in China has grown dramatically in the last five years. Previously most processing was for export, while today at least 50 per cent is for domestic use, and this is growing year on year. Consumers in China were previously driven by price. But today quality and color come first. This is mainly because the average Chinese consumers have higher disposable income. Unemployment is low, salaries are rising, and pension schemes have given people a greater security of income and more money to spend.

Although wool only represents 15 per cent of fibers consumed in China, volumes are so large that even 15 per cent represents a huge quantity of wool. Even in Mongolia, women wear woolen coats. Apart from China, steady demand from buyers in Europe and India will see wool prices firm up for some time.