where to for wool and sheepmeat? · international wool textile organisation asi board of directors...
TRANSCRIPT
Where to for Wool and
Sheepmeat?
Chris Wilcox
Chairman, Market Intelligence Committee
International Wool Textile Organisation
ASI Board of Directors
30th January 2016
Topics
World wool and
sheepmeat
production
Wool and lamb
prices
Demand trends and
drivers
Prospects in 2016
Long term prospects
and strategic drivers
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 2014-2016
• World sheepmeat production now at the highest level in over
50 years
0
200
400
600
800
1000
1200
1400
1600
1800
mkg clean
Production Opening stocks
World Wool Production and 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
5000
5500
6000
6500
7000
7500
8000
8500
9000
tonnes
World Sheepmeat Production
Source: FAO of the United Nations, Poimena Analysis
Downloaded January 2016
Australia36.1%
New Zealand34.7%
UK9.0%
Ireland3.7%
Spain2.9%
USA0.3%
Other13.2%
Source: FAO of the United Nations
Downloaded January 2016
World Trade in Sheepmeat - 2013
1,144,600 tonnes
400
600
800
1,000
1,200
1,400
1,600
2008 2009 2010 2011 2012 2013 2014 2015 2016
US cents/kg
Source: AWEX – 2014/15 basis
Data to 22nd January 2016
Australian Wool PricesEastern Market Indicator
1061
1494
458
trend
Global
Financial
Crisis
906
World economic
recovery, cotton
prices surge
Euro debt
crisis
835
895
Source: MLA, NLRS, Beef & Lamb NZ, USDA
Notes: Trade lamb for Australia, all lamb export price for NZ and 55-65 lb, choice and prime lamb for US
Data to December 2015
US$ Lamb Prices Drop Back
0
100
200
300
400
500
600
700
800
900
Australia NZ USA
USc/kg
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 double-
faced 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
Source: OTEXA, data to November 2015
US Imports of Apparel - Value12 month moving average - year-on-year change
-20%
-10%
0%
10%
20%
30%
Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16
Wool Cotton Synthetics
% change y-o-y
Wool Imports by China Up – Lower for Other Major
Processing Countries(Calendar Year to November)
0
100
200
300
400
500
600
700
China India Europe Other Total
mkg greasy equiv.
2010 2011 20122013 2014 2015
-2%
+8%
-13%
+3%
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
-6%
0
50,000
100,000
150,000
200,000
250,000Australia
2010 2012 2014 2015
Tonnes
Growing Demand for Lamb from the Middle East
and China
Source: DAFF, Beef + Lamb NZ, MLA
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000New Zealand
2010 2012 2014 2015
Tonnes
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
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
Apparel Wool Consumption Rises as Incomes Lift
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
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$/head)
Italy
UK
Turkey
Japan
USA
Germany
S Korea
India China
Spain
Australia
Russia
France
Wool consum
ption (
cle
an k
g/p
er
head)
Source: International Monetary Fund and Woolmark
Apparel wool consumption is apparel NDA at retail average 2011-2013 as estimated by Poimena
Analysis. Income is US$ GDP per head in 2013 on a purchasing power parity basis.
Trend Line
Product Segment Prospects
Growth Mainstay Decline
100
200
300
400
500
Index n
um
ber:
1961=
100
1960 1970 1980 1990 2000 2010
Roots and tubers Cereals
Meat Milk
Eggs
Protein Consumption Growing Rapidly
Source: FAO – Presentation by Battista at the IWTO 2013 Congress
Increased Demand for Sheep Meat
0
20
40
60
80
100
120
140
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
bovine ovine pigmeat poultry
Types -- Developing countries
2005-07 (million tons) (right scale)
2050 (million tons) (right scale)
growth p.a. 1970-2007 (left scale)
growth p.a. 2005/07-2050 (left scale)
0
50
100
150
200
250
300
350
400
450
500
0
1
2
3
4
5
6
7
All meats
2005-07 (million tons) (right scale)
2050 (million tons) (right scale)
growth p.a. 1970-2007 (left scale)
growth p.a. 2005/07-2050 (left scale)
Source: FAO – Presentation by Battista at the IWTO 2013 Congress
Thank You!