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OUTLOOK 2007 6 March 2007 |
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| Fibre demand increasing but wool to remain under pressure |
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| Economic growth, population growth and fashion are the key to the demand for fibres, according to Frank Drum, Commodity Analyst, ABARE speaking at the OUTLOOK conference today. "Income growth, has increased the overall demand for fibres, however the impact for the major fibres has been quite different." Mr Drum said. "The consumption of cotton is now around 30 per cent greater than it was in the early 1990s, while for wool the overall consumption has fallen in this time" Mr Drum noted Mr Drum highlighted that over the five years to 2011-12, cotton prices are projected to increase in real terms as world consumption exceeds production and stocks remain low. In contrast, wool prices are projected to ease as production expands faster than demand and competition from substitute synthetic fibres remains intense. Chris Wilcox, Chief Economist, Woolmark Company, spoke of the importance of the wool industry playing to its strengths to secure future demand. "Competition has increased with the development of synthetics, especially for higher micron wool. The Australian wool industry must work hard to promote demand for wool, especially finer micron wool." Mr Wilcox said Hamish Millar, Chairman of Australian Cotton Growers Research Association, highlighted of some of the challenges that face the industry. "Water availability and prices are two variables we have little control over. However, the cost of production is one area we can influence," said Mr Millar. Mr Millar spoke of the declining trend in farm profitability and how in the future, the cost of inputs is one thing that growers can manage. Mr Millar said that innovation through research and development was critical in reducing inputs of energy, irrigation, fertiliser and pesticides while optimising the use of available land and water. |
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| Copies of available speakers' presentation and papers are available at ABARE's OUTLOOK website, OUTLOOK 2007 or phone 02 6272 2010. For general media enquiries, contact Maree Finnegan, Media Coordinator on 02 6272 2260 or email mfinnegan@abare.gov.au. |
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