Australia’s wool exports are forecast to rise by four per cent in 2017–18. Wool demand will continue to grow in the European Union and the US, the major international markets for imported woolen clothing. Demand for luxury woolen textiles is rising in major international markets especially China.

Australian wool prices are forecast to rise eight per cent in 2016-7. Prices are expected to peak next year before easing in real terms as wool production increases. And, by the end of 2021-22, prices are expected to still be relatively high, at around ten per cent above the ten-year average in real terms.

The upward trend in prices reflects the constrained supply of apparel wool—given lower flock numbers—and firm demand, particularly for fine wool. The continuing growth in wool demand has led to an increase in the price of wool in Australian dollars since 2014.

By the end of 2016-17, shorn wool production is forecast to be five per cent higher than last year, reflecting flock rebuilding across the sector supported by good pasture growth on the back of the 2016 rainfall. And the national sheep flock is forecast to increase to 73.6 million heads in 2016-17 and to continue increasing to around 83 million heads by 2021-22.