Given that apparel fibre prices trade at markedly different price levels, all price series have been based on early January 2020 levels (set to equal 1). The original price series were all in US dollar terms, to look at prices from the perspective of supply chains rather than through the distortion of the Australian dollar.
Figure 1 compares price indices for cotton (Cotlook A Index), a polyester staple fibre series, an acrylic staple fibre series, the average Merino micron price series and a viscose series, from early January. The Merino, cotton and polyester indices suffered similar falls (down around 25%) by late March/early April. The acrylic and viscose indices have trended lower but to a lesser extent. In April, the apparel indices all steadied with polyester and cotton bouncing. Polyester has since lost most of the bounce in value.
So, what does Figure 1 tell us? It shows the economic shock from to lockdowns due COVID-19 has had a similar impact on the major fibres (cotton and polyester) and on wool which is traded mainly on public auctions. Wool prices once again have followed a path common to the general apparel fibre market complex.
In Figure 2 a Merino fleece series drawn from 16 micron (with a staple length of 75 mm and a staple strength of 35 N/ktx) is compared to a Chinese raw silk series and a goose downs feather series. Daily prices for the silk and downs series are available. In March the 16 micron, silk and downs series all weakened. The 16 micron wool series is the best performer, on par with viscose and acrylic.
Where apparel fibre prices go now, depends on the time lockdowns continue and then how recovery in health and economic terms develops, starting with the lifting of lockdowns. Supply chains are in the dark as much as anyone else at this point, as it is simply not clear how quickly recovery will come.
What does it mean?
Merino prices have followed a similar path down since February, to other apparel fibres. The external economic shock from lockdowns due to COVID-19 has been common to all fibres. Where prices go now, depends on the persistence of lockdowns and recovery from COVID-19.
- Apparel fibre prices have fallen since late February
- Merino prices have followed a path similar to cotton and polyester staple
- 16 micron prices are performing relatively well, in line with acrylic and viscose
Click on graph to expand
Click on graph to expand
Data sources: AWEX, RBA, Cotlook, Emerging Textiles, ICS