Woolgrowers buoyed by rising prices

By Boyd Champness

Australias woolgrowers are likely to increase production for the first time in a decade as they rush to meet increased prices and rising demand.

Prices have increased by 25% since the start of the year and last week fell slightly with the Eastern Market Indicator finishing at $A7.26/kg – still a long way shy from the record high of $A12.60/kg reached during 1989.

Even though production has been on a downward spiral since the early 1990s – reflecting the slump in prices – Australia remains the worlds largest wool producer and exporter. Nevertheless, the nations sheep flock, expected to be 112 million head in 2000-01, is now at 45-year low.

Strong demand from Australias biggest customer, China, has helped lift prices with the communist state buying $A643 million worth of Australian wool last year.

The Chinese Government has also issued new wool quotas, giving mills a lot more autonomy when it comes to making purchases.