Where to for Wool and Sheepmeat?

Transcription

1 Where to for Wool and Sheepmeat? Chris Wilcox Chairman, Market Intelligence Committee International Wool Textile Organisation ASI Board of Directors 30 th January 2016

2 Topics World wool and sheepmeat production Wool and lamb prices Demand trends and drivers Prospects in 2016 Long term prospects and strategic drivers

3 World Wool Production Low, Sheepmeat Production Rises World wool production at lowest level in 70 years Shift in interest in key wool producing countries to meat-sheep and dual-purpose sheep World production of sheep meat has increased steadily in the past decade Stabilizes in World sheepmeat production now at the highest level in over 50 years

4 World Wool Production and Stocks mkg clean Production Opening stocks Source: Poimena Analysis and International Wool Textile Organisation Note: The year refers to the season ending eg 2000 = 1999/2000 Data in 2015 is an estimate and in 2016 is a forecast Updated January 2016

5 World Sheepmeat Production tonnes Source: FAO of the United Nations, Poimena Analysis Downloaded January 2016

6 World Trade in Sheepmeat Spain 2.9% USA 0.3% Other 13.2% Australia 36.1% Ireland 3.7% UK 9.0% New Zealand 34.7% 1,144,600 tonnes Source: FAO of the United Nations Downloaded January 2016

7 Australian Wool Prices Eastern Market Indicator US cents/kg 1,600 1,400 World economic recovery, cotton prices surge , , trend Global Financial Crisis Euro debt crisis Source: AWEX 2014/15 basis Data to 22 nd January 2016

8 US$ Lamb Prices Drop Back USc/kg Australia NZ USA 0 Source: Notes: MLA, NLRS, Beef & Lamb NZ, USDA Trade lamb for Australia, all lamb export price for NZ and lb, choice and prime lamb for US Data to December 2015

9 Current Demand Drivers General Improving economic growth in key advanced countries China in transition US$ rises against main producing countries Wool Fashion trend towards woollen woven doublefaced fabric for women s overcoats Increased demand for raw wool by China BUT slowdown in China wool clothing product exports and US imports of wool clothing Lamb and Sheepmeat Rising consumer incomes bring higher demand in China Increased demand from Middle East

10 US Imports of Apparel - Value 12 month moving average - year-on-year change % change y-o-y 30% Wool Cotton Synthetics 20% 10% 0% -10% -20% Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Source: OTEXA, data to November 2015

11 Wool Imports by China Up Lower for Other Major Processing Countries (Calendar Year to November) mkg greasy equiv % % % -13% -6% China India Europe Other Total Note: From the five major exporting countries (Australia, New Zealand, Argentina, Uruguay and South Africa Source: Australian Bureau of Statistics, FLA, SUL, Capewools, NZ Meat and Wool

12 Growing Demand for Lamb from the Middle East and China Tonnes 250,000 Australia Tonnes 350,000 New Zealand 200, , , , , , , ,000 50,000 50, Source: DAFF, Beef + Lamb NZ, MLA

13 Key Drivers of Demand and Prospects for 2016 Uneven economic growth in 2016 Solid in US and UK, improving in Europe and Japan China slowing and in transition the key for wool Consumer confidence more positive BUT Disappointing results for US imports of wool products High price ratio for wool against cotton prices and synthetic fibres Higher US$ against the A$ and NZ$ Higher demand for lamb and sheepmeat from the Middle East and US Positive conditions but risks remain

14 What about the longer term? Long-term prospects for wool depend on global economic conditions and income growth, not relative production with other fibres Rising consumer incomes in China and other emerging countries will drive demand for food and particularly protein On demand side, focus should be on consumer requirements Business-wear for men will be a mainstay for wool along with women s overcoats Knitwear a growth area, particularly with increased demand for active leisurewear and casual garments Innovative cuts of lamb meat will attract consumers

15 Wool consumption (clean kg/per head) Apparel Wool Consumption Rises as Incomes Lift Italy Japan S Korea UK Australia Trend Line India China Turkey Russia Spain France Germany 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 Income (US$/head) USA Source: International Monetary Fund and Woolmark Apparel wool consumption is apparel NDA at retail average as estimated by Poimena Analysis. Income is US$ GDP per head in 2013 on a purchasing power parity basis.

16 Product Segment Prospects Growth Mainstay Decline

17 Protein Consumption Growing Rapidly Roots and tubers Meat Eggs Cereals Milk Source: FAO Presentation by Battista at the IWTO 2013 Congress

18 Increased Demand for Sheep Meat All meats Types -- Developing countries bovine ovine pigmeat poultry (million tons) (right scale) (million tons) (right scale) 2050 (million tons) (right scale) 2050 (million tons) (right scale) growth p.a (left scale) growth p.a (left scale) growth p.a. 2005/ (left scale) growth p.a. 2005/ (left scale) Source: FAO Presentation by Battista at the IWTO 2013 Congress

19 Thank You!