Australian wool prices are forecast to increase in 2015-16, supported by increased processor demand, a lower Australian dollar and falling production.In 2015–16 Australian shorn wool production is forecast to fall by three per cent, the lowest in more than six decades.

The increase in export demand partly reflects firmer consumer demand for clothing in the United States and some countries in the European Union, together with a refill of wool inventories in major garment manufacturing centers. These factors drove stronger wool buying in the first half of 2015, with most major wool producing countries recording increased export volumes and higher prices.

Demand from China has been particularly strong. In the four months to April 2015, the volume of Australian raw wool exports to China lifted seven per cent and their value rose 16 per cent. Exports also increased by 16 per cent to the Czech Republic, by 40 per cent to Malaysia and to the Republic of Korea.

In 2015–16 demand for wool from major processing countries is expected to remain relatively firm, reflecting improving demand for woolen apparel in some major world markets such as in the United States and parts of the European Union.

Australian wool exports are estimated to remain relatively flat 2014–15, reflecting static shorn wool production.