Update on Argentine wool production


Argentine wool production amounts to 8% of the Australian wool clip total volume. While the headline volume appears small in comparison to the Australian clip, when looked at in more detail (all wools are not equal) Argentine production matches Australia in some areas. This article takes a look at recent Argentine wool production.

La Niña when it occurs is not good news for South America, with drought in Argentina (and Uruguay) helping push the Argentine flock down 6.6% in 2022-23 to 12.46 million sheep. Current projections for the current season are for a 1.1% rise to 12.6 million. As noted last year, most Argentine wool exports are in the form of wool tops (77%). Consequently, exports to China (mainly in the form of greasy wool) make up only 15% of Argentine wool exports. This Argentine wool production and export data are available on the Federacion Lanera Argentina (FLA) website (see here).  

Figure 1 compares the Australian and Argentine wool production last season, with the micron increments used by the FLA, in clean metric tonnes. Note the increments are a half micron to 20.0 and then become full micron for the broader categories until 31 micron. Above the Argentine volumes, the proportion of the comparable Australian micron category is provided, for example, Argentine production of 21.0-21.9 micron is 19% of Australian production. As noted above, overall the Argentine clip on a clean basis is 8% of the size of the Australian wool clip.

The Argentine clip is not static. Figure 2 shows the change in micron distribution since 2005-6. There has been a notable drop in the proportion of 27 to 29.9-micron wool in Argentina, no doubt a decision that looks even better given the performance of these micron categories in recent years.  In contrast, there has been a move finer, with increased proportion for the 24-micron and finer-micron categories.

Like Australia, very little Argentine wool is consumed domestically. They do seem to carry high levels of stock or carry-over. Figure 3 shows the FLA reported exports and carry-over volumes by season expressed as a proportion of full-season wool production from 2009-10 to last season. Up until 2017-2018 carry-over levels were 60-70% of annual production. Since then the level of exports has dropped and carry-over has risen. For 2022-23 carry-over was estimated at 149% of annual production, roughly twice the level for pre-2018. Presumably, a lot of the increase in carry-over stock is made up of the coarser micron categories, which still account for around 20% of production.

Finally, Figure 4 compares the Argentine wool production to Australian non-mulesed auction sale volumes for last season directly in clean terms. This is where Argentine production matches Australia in some categories, from 19.5 through 22.9 micron, and again for 30-30.9 micron.

What does it mean?

Swings in Argentine wool supply for merino wool on the broader side of the distribution (19.5 micron plus) will have a material impact on the supply of non-mulesed merino wool for these micron categories. Reported Argentine stocks match general international feedback about broader micron (crossbred) stocks of wool having built up in recent years in response to depressed prices. This will delay the recovery in these micron categories.

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Key Points

  • Argentine wool production is running at 8% of Australian production, with the main micron category 20-20.9 micron.
  • The proportion of 27 to 29.9-micron wool in the Argentine clip has shrunk dramatically in recent decades.
  • Reported carry-over stocks in Argentina have risen from a fairly normal 60-70% of annual production to 149% in 2022-23, presumably made up of broader micron wool.
  • Argentina matches Australia for production of non-mulesed 19.5 to 23-micron wool.

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Click on figure to expand

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Data sources: AWEX, FLA, ICS , Mecardo

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