Italians keen to buy the best

IN scenes reminiscent of previous decades the largest wool buying firms kept their foot to the floor during sales this week to ensure a positive outcome for the wool market in all three selling centres. 

While the outcome was still a small negative movement of 4 US Cents for the market overall the declining local currency meant that the market closed 17 cents higher in Aussie Dollar terms and more importantly has a very positive tone going into the recess.

A negative mood, or a falling market would have stymied any possible sales of greasy, top or yarn over the recess, but with a good solid close traders should feel comfortable to continue trading in at least a limited capacity until sales resume again on August 20 and in turn build some demand for when sales recommence. 

Superfine Merino fleece benefited most from the improved market sentiment this week and rebounded by 50 cents or more to go some way towards regaining the ground lost over the past two months. 

The quality of the superfine wool on offer this week was certainly of interest to the established Italian brigade and they made sure that the best wools were earmarked for combing in Italy. 

Medium Merino fleece tended to be a little more circumspect unsurprisingly given the larger volume, and the broader Merino fleece was keenly sought after. Knitwear types with good specs found willing buyers every day and some of the best brokens will no doubt be used as fleece substitutes in the eventual combing mill blends. 

Crossbred wools also managed to climb back up the slope to where they had previously been and are sitting quite comfortably now awaiting new market signals on the other side of the recess. 

Like the rest of the Italian wool industry, and in fact most of the European textile houses, summer holidays have come early for the Pratesi but hopefully after four weeks on their sailing boats on the lake or the sea they will return with renewed vigour and aspiration. 

One ECB interest rate cut has already taken place and will be filtering through the economy, with further cuts pending which should assist businesses, but importantly lift the psyche of the consumer in Europe.

Like consumers in many other parts of the world, the European Consumer has had plenty of things to worry about, and cost increases to manage, so hopefully these interest rate cuts will have their intended effect and begin to lighten the burden somewhat. 

Plenty of work has already been done across Europe and they know and respect wool for what it is, so the upturn in demand should be relatively simple – when that demand does return. 

IN CHINA there is still a lot of development and education work taking place. 

At the recent Wool Salon meeting delegates spoke about sports brands learning about the functionality and performance of wool as a result of the Beijing Winter Olympics. 

While it is positive that these firms are embracing the attributes of wool and moving towards more of it in their collections, it does highlight the gap in education not just at the consumer level, but also at the manufacturer level in a developing market such as China, compared to a mature market such as Europe. 

Obviously in the world’s second largest consumer market there is still an ongoing education piece to complete and the industry needs to continue to fund this work obviously for the long term benefits which will eventually flow. 

Chinese consumers have endured a fairly torrid 12-months as well, but thankfully for the Australian wool industry manufacturers servicing them have flexed and pivoted enough to adjust their offering to what would actually sell and have not built a mountain of unsold garments. 

While the temperature is in the mid 30s for the next week or 10 days in Shanghai it is fairly difficult to get people enthusiastic about purchasing woollen garments. 

That will change by the time National Holidays roll around in October and that kicks off the first really big retail event which the industry will be gearing up for. 

With so much of China’s commerce now taking place online in preference to bricks and mortar stores making sure the supply chains are primed and ready to go is a delicate art. 

Many had thought or hoped for some positive policy announcements from the recent Plenary Session in Beijing, only to be fed the usual communique of bland statements pledging to continue the good work achieved so far.