Wool – agricultural land investment

History suggests the price of wool is closely correlated to the health of the global economy. As a non-essential purchase for most consumers this makes sense; the buying of a woollen garment requires the consumer to have a level of disposable income and when an economy is struggling, disposable income is often harder to find

2020 has started from a low base in terms of global demand, and sadly with drought and fire still gripping many wool growing regions, wool production is not expected to increase any time soon. The latest wool production forecast for the current year is at just 272 million kilograms but this is likely to drop further when the committee meets in April. On the upside, trade tensions between two of our top three wool-consuming countries are easing and a clearer Brexit path has now been laid out after the UK elections. The bottom line is that we all hope 2020 is a year for better seasons for woolgrowers, and in terms of demand for wool, AWI CEO Stuart McCullough recently stated on The Yarn podcast; “I still believe Merino wool is a $20 fibre. Why? Because Cashmere is a $100 fibre and Merino wool has many of the same characteristics.” Increasingly consumers in key markets are wanting to feel good about what they purchase and how it affects the planet. Buying a renewable, natural and biodegradable fibre such as wool, is perfect for the conscious consumer. Our job is to help promote wool’s superior characteristics both as a functional fabric but as a fibre that is kind to the planet.

The graph below shows how the price of wool dropped throughout 2019 due to the uncertain global economic situation

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