where to for wool and sheepmeat? · international wool textile organisation asi board of directors...
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![Page 1: Where to for Wool and Sheepmeat? · International Wool Textile Organisation ASI Board of Directors 30th January 2016. Topics World wool and ... ‒ Business-wear for men will be a](https://reader034.vdocuments.site/reader034/viewer/2022042308/5ed496188ab24b2a5a37ecea/html5/thumbnails/1.jpg)
Where to for Wool and
Sheepmeat?
Chris Wilcox
Chairman, Market Intelligence Committee
International Wool Textile Organisation
ASI Board of Directors
30th January 2016
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Topics
World wool and
sheepmeat
production
Wool and lamb
prices
Demand trends and
drivers
Prospects in 2016
Long term prospects
and strategic drivers
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World Wool Production Low, Sheepmeat
Production Rises
• World wool production at lowest level in 70 years
• Shift in interest in key wool producing countries to meat-sheep
and dual-purpose sheep
• World production of sheep meat has increased steadily in the
past decade– Stabilizes in 2014-2016
• World sheepmeat production now at the highest level in over
50 years
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0
200
400
600
800
1000
1200
1400
1600
1800
mkg clean
Production Opening stocks
World Wool Production and Stocks
Source: Poimena Analysis and International Wool Textile Organisation
Note: The year refers to the season ending eg 2000 = 1999/2000
Data in 2015 is an estimate and in 2016 is a forecast
Updated January 2016
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5000
5500
6000
6500
7000
7500
8000
8500
9000
tonnes
World Sheepmeat Production
Source: FAO of the United Nations, Poimena Analysis
Downloaded January 2016
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Australia36.1%
New Zealand34.7%
UK9.0%
Ireland3.7%
Spain2.9%
USA0.3%
Other13.2%
Source: FAO of the United Nations
Downloaded January 2016
World Trade in Sheepmeat - 2013
1,144,600 tonnes
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400
600
800
1,000
1,200
1,400
1,600
2008 2009 2010 2011 2012 2013 2014 2015 2016
US cents/kg
Source: AWEX – 2014/15 basis
Data to 22nd January 2016
Australian Wool PricesEastern Market Indicator
1061
1494
458
trend
Global
Financial
Crisis
906
World economic
recovery, cotton
prices surge
Euro debt
crisis
835
895
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Source: MLA, NLRS, Beef & Lamb NZ, USDA
Notes: Trade lamb for Australia, all lamb export price for NZ and 55-65 lb, choice and prime lamb for US
Data to December 2015
US$ Lamb Prices Drop Back
0
100
200
300
400
500
600
700
800
900
Australia NZ USA
USc/kg
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Current Demand Drivers
General– Improving economic growth in key advanced
countries
– China in transition
– US$ rises against main producing countries
Wool– Fashion trend towards woollen woven double-
faced fabric for women’s overcoats
– Increased demand for raw wool by China
– BUT – slowdown in China wool clothing
product exports and US imports of wool
clothing
Lamb and Sheepmeat– Rising consumer incomes bring higher
demand in China
– Increased demand from Middle East
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Source: OTEXA, data to November 2015
US Imports of Apparel - Value12 month moving average - year-on-year change
-20%
-10%
0%
10%
20%
30%
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16
Wool Cotton Synthetics
% change y-o-y
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Wool Imports by China Up – Lower for Other Major
Processing Countries(Calendar Year to November)
0
100
200
300
400
500
600
700
China India Europe Other Total
mkg greasy equiv.
2010 2011 20122013 2014 2015
-2%
+8%
-13%
+3%
Note: From the five major exporting countries (Australia, New Zealand, Argentina, Uruguay and
South Africa
Source: Australian Bureau of Statistics, FLA, SUL, Capewools, NZ Meat and Wool
-6%
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0
50,000
100,000
150,000
200,000
250,000Australia
2010 2012 2014 2015
Tonnes
Growing Demand for Lamb from the Middle East
and China
Source: DAFF, Beef + Lamb NZ, MLA
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000New Zealand
2010 2012 2014 2015
Tonnes
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Key Drivers of Demand and Prospects for 2016
• Uneven economic growth in 2016
– Solid in US and UK, improving in Europe and Japan
– China slowing and in transition – the key for wool
• Consumer confidence more positive
• BUT… Disappointing results for US’ imports of wool
products
• High price ratio for wool against cotton prices and synthetic
fibres
• Higher US$ against the A$ and NZ$
• Higher demand for lamb and sheepmeat from the Middle
East and US
Positive conditions but risks remain
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What about the longer term?
• Long-term prospects for wool depend on
global economic conditions and income
growth, not relative production with other
fibres
• Rising consumer incomes in China and other
emerging countries will drive demand for food
and particularly protein
• On demand side, focus should be on
consumer requirements‒ Business-wear for men will be a mainstay for
wool along with women’s overcoats
‒ Knitwear a growth area, particularly with
increased demand for active leisurewear and
casual garments
‒ Innovative cuts of lamb meat will attract
consumers
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Apparel Wool Consumption Rises as Incomes Lift
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000
Income (US$/head)
Italy
UK
Turkey
Japan
USA
Germany
S Korea
India China
Spain
Australia
Russia
France
Wool consum
ption (
cle
an k
g/p
er
head)
Source: International Monetary Fund and Woolmark
Apparel wool consumption is apparel NDA at retail average 2011-2013 as estimated by Poimena
Analysis. Income is US$ GDP per head in 2013 on a purchasing power parity basis.
Trend Line
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Product Segment Prospects
Growth Mainstay Decline
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100
200
300
400
500
Index n
um
ber:
1961=
100
1960 1970 1980 1990 2000 2010
Roots and tubers Cereals
Meat Milk
Eggs
Protein Consumption Growing Rapidly
Source: FAO – Presentation by Battista at the IWTO 2013 Congress
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Increased Demand for Sheep Meat
0
20
40
60
80
100
120
140
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
bovine ovine pigmeat poultry
Types -- Developing countries
2005-07 (million tons) (right scale)
2050 (million tons) (right scale)
growth p.a. 1970-2007 (left scale)
growth p.a. 2005/07-2050 (left scale)
0
50
100
150
200
250
300
350
400
450
500
0
1
2
3
4
5
6
7
All meats
2005-07 (million tons) (right scale)
2050 (million tons) (right scale)
growth p.a. 1970-2007 (left scale)
growth p.a. 2005/07-2050 (left scale)
Source: FAO – Presentation by Battista at the IWTO 2013 Congress
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Thank You!