It is volatile, unpredictable, difficult to grasp, exciting, and challenging – this is the wool price characteristic of wool traders, exporters and processors. The Australian Wool Development Corporation (AWI) market intelligence report predicts that in the near term, the Eastern Market Index (EMI) will remain around A$12.

The Economist Intelligence Unit (EIU) is an economic intelligence provider headquartered in the United Kingdom. According to the EIU recommendation, the average selling price of (Millerino) wool apparel in 2011/12 should be around A$12.32 and will remain above A$10 until the end of 2013.

Like the AWI report, the Australian Bureau of Agricultural Resources, Economic, and Technology (ABARES) also predicts that the Australian Merino Wool Eastern Market Index will remain around $12.

However, we all know the uncertainty of the price of wool, and the current economic uncertainties in Europe and the United States still exist.

We understand that wool exporters are optimistic about the demand for wool and believe that overall demand will increase.

Martin Curtis, British Curtis Wool Direct Purchase Co., Ltd. commented that we expect the economic level of the United Kingdom and the United States to gradually increase in 2012. The economies of China and the Far East will continue to grow at slightly below double-digit levels, and the European economy will experience a series of fluctuations. The production of British wool, New Zealand wool and Norwegian wool fell sharply, as these countries are the main producers of high-quality hybrid hairs, resulting in a shortage of wool production.

Mr. Curtis believes that the supply of wool products will take a long time to increase; and as the world's population continues to grow, the demand for food, clothing and shelter will increase accordingly. Consumers also seem to be increasingly supporting wool. Mr. Curtis claims that part of the reason for this “closer feeling of wool” is due to the wool movement.

Mr. Olivier Segard of Segard Masurel in France believes that at present, the demand for apparel wool in the European market is slowing down. Having said that, retail wool seems to have more than ever before. This is probably the reason why the price of wool has not fallen sharply in recent months. In addition, contrary to the situation at the end of 2008, wool stocks are not much. Since the basic demand for wool has always existed, the raw wool and wool primary processing trade will not be interrupted.

The situation for carpets and indoor wool products is slightly different. The markets of Europe, the United States, Australia and New Zealand are very calm. Demand for wool is declining, and alternative fibers are gaining attention, Mr. Segard said.

Mr. Segard pointed out that due to the increasing demand in China, the price of wool has remained at the market price level so far, but we really do not know how long it will last. The uncertainty of the global economy will eventually affect the demand in the Chinese market. However, when the overall confidence is restored, we will see a healthy development of the hybrid hair market.

Mr. Segard believes that the long-term demand for wool will continue, but competition pressure from other fibers will also increase. Wool producers and wool industries need to promote and publicize.

Mr. Segard is a member of the Executive Committee of the International Wool Textile Organization (IWTO). He has witnessed the unremitting efforts of the IWTO to dedicate itself to the global wool industry and to coordinate the development of the member country's wool textile industry. However, there is no free lunch under the sky. He said that the IWTO sincerely welcomes outside financial assistance. Some political initiatives in the southern hemisphere wool-producing countries are also conducive to uniting the entire wool textile industry.

The news that China's market demand is steady has been recognized by the New Zealand wool bureau. Mr. AlRoss just concluded his visit to China. He said that the supply of carpet yarn in China is in short supply. Most of this demand comes from the Chinese domestic market because its carpet export volume is less than 10%. As wool carpets are sold as luxury goods, the demand for luxury goods in China has not been affected by the slow economic development and the financial crisis in Europe and the United States. Mr. AlRoss said that this demand is very large and many manufacturers even switched from hand-knitting to carpet yarn production to meet market demand. “The investment in new equipment is considerable, using the latest technology from Italy, Belgium and the United States, so the quality of the finished product has greatly improved.”

“New Zealand wool is positioned as a high-end raw material for woven carpets, and the continued growth of the Chinese luxury goods industry, the hotel industry and the recent residential sector has helped to stimulate demand for New Zealand wool,” said Mr. AlRoss.

So far this year, the Chinese market has accounted for 48% of New Zealand wool exports.

Lanas Trinidad, Laguita’s largest bartending company, is optimistic that the market will be more “rational” in the coming year. Mr. Pedro Otegui said that Uruguay will start with “zero inventory” in 2011/2012. “Wool producers, processors or exporters will not have inventories, and other wool-producing countries have not carried forward stocks. Wool purchasers have been taking a wait-and-see attitude for the past few months, and of course there is not a lot of inventory at all.”

"This year's wool production is about the same as last year," he said. "In view of the good weather this year, the quality of wool is expected to increase."

Uruguay’s wool top exports to China fell from the previous 47/52% to 32.9% and its total exports reached 21200 tons. China remains the main export destination of Uruguay tops. The proportion of tops exported from Italy and Germany to China accounts for 33%, and exports to other European countries have increased. This proportion had reached 50% and it was not seen for many years.