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World non-mulesed merino supply

Discussion of the supply of non-mulesed merino wool (for this article we will include both ceased mulesed and non-mulesed wool) in Australia tends to be centred about the Australian supply, as Australia is the dominant supplier of merino wool. This article takes a look at non-mulesed merino production by micron from an international perspective.

Last December Mecardo looked at the world production of merino wool, putting merino production in context with the larger apparel fibres. Figure 1 uses the same data from the earlier article and is an estimate of production for last season (2019-20) with Russian and Chinese wool estimates omitted, as there is considerable uncertainty to the quality of the data and the quality of the wool the data pertains to.

Figure 1 shows the estimated production of merino wool by micron from the major producers, broken into Australian and Other (regions). The volume is shown in clean millions of kilograms. At the top of micron column is the proportion of production accounted for by Australia. For example Australia accounts for some 83% of 18 micron production, on a clean basis, while it only accounts for 24% of 22 micron merino production – even less when comebacks/corriedales are thrown into the mix as topmakers seek to optimise their margins.

As of mid- March 2021 some 14% of merino wool had been sold in Australia at auction accredited as CM-NM. Figure 2 shows the proportion by micron category of merino wool sold at auction this season (to date). For the big 19 and 20 micron categories, some 11% has been sold as CM-NM. The proportion rises as the micron becomes finer, with half of the 14 and 15 micron categories CM-NM. The proportion also rises on the broad end of the merino spectrum but on very small volumes.

In Figure 3 the Australian volume of non-mulesed wool by micron category is calculated using last season’s volumes multiplied by the current season CM-NM proportions. There is an element of licence in such a calculation but it serves to enable the construction of an international view of non-mulesed merino supply, taking into account the rising Australian proportion of CM-NM merino wool. The Australian estimate of non-mulesed merino wool is added to the Other wool, which is non-mulesed. At the top of each micron column the proportion of Australian supply is shown.  For 18 micron Australia supplies 39% of world production and for 22 micron a mere 3%. For 17 micron and finer Australia supplies about half of the non-mulesed wool available.

Figure 3 explains in part how the demand for non-mulesed wool has developed, despite relatively low supplies from Australia. It was in the second half of 2018 that demand for non-mulesed wool really started to shown up at Australian auctions. Before that there was enough wool from other origins (as Figure 3 shows) for the supply chain to begin sourcing non-mulesed wool. As Figure 1 shows that steady development of demand could only go so far, before the demand would spill over into the Australian greasy market as it did in 2018.

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What does it mean?

Other region (non-Australian) supplies of non-mulesed merino wool have allowed the supply chain to develop demand for this wool. For the demand to continue growing, increased supplies will have to come from Australia, the dominant merino producer especially in the big micron categories of 18 to 20 micron.

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Key Points

  • Australia is the dominant producer of 20 micron and finer merino wool.
  • When it comes to non-mulesed wool Australia accounts for half of 17 micron and finer volumes, but only 28% of 19 micron volumes and 3% of 22 micron volumes.
  • The Australian supply of 21 micron and broader non-mulesed merino wool is insignificant.

Click on figure to expand

Click on figure to expand

Click on figure to expand

Data sources: IWTO, Cape Wools, FLA, NZWTA, AWEX, USDA, Delta Animal Production Consultants, Independent Commodity Services P/L

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