Since 2003 the use of apparel wool as an end product has dropped by 20% worldwide. Fortunately the decline in Europe and Japan has been offset by better consumption in the US, China and Korea. Local production of wool finer than 25 micron is down to about 45 million kilograms against 97 million kilograms in 1990. General manager of Cape Wools, André Strydom talks to Roelof Bezuidenhout about changes in the wool industry.
Why has wool fallen off European shopping lists so quickly? One reason is that during the past 10 years the knitting ware sector has moved from Italy, Japan and Britain to Asia – without taking the know-how and experience with it. Easier choices were made and this resulted in knitted wool products losing market share to synthetics during this period.
At the same time the market for ladies’ wear took a knock as a result of the need for shorter production runs and a variety of colours. Again, the expertise for this was left behind in Europe.
Can the situation be improved? The cost of turning raw wool into a final product will always be greater than for cotton and synthetics because these are processed on bigger, faster machines. Ultimately, the wool industry simply has to achieve a balance between affordability to consumers and sustainability at producer level. A total value chain must follow an integrated approach to ethical questions and environment-friendly processing.
The modern consumer expects this without necessarily being prepared to pay more for it. As fibre awareness is low on the consumer’s list, generic promotion of wool, coupled with trademarks, is essential to educate shoppers about wool’s unique properties.
Chain stores are the prime price-makers and control 86% of the clothing market in the US, 83% in Japan and 58% in the EU. There are new market opportunities for products such as luxury casual wear, active sportswear and tailored suits. Machine-washable and easy care is no longer optional. Generally speaking the new consumer and market environment demands a variety of strategies. Some markets are volume driven, others are fired by value.
Established markets must be protected while potential new markets such as India, Russia and China must be approached aggressively. Europe is an ageing market – 20% of the population is older than 60. Even though this generation could possibly be more loyal towards wool, they have less money to spend on items such as clothing.
The situation in Asia is more favourable for wool as only 11% of the population is older than 60. What other global developments could affect wool farming? The International Wool Textile Organisation (IWTO) has dramatically changed from being a “European club” to an international trade organisation representing the total value chain, with marketing and promotion its main aim. However, the IWTO still plays a key role on the technical side. Then there’s the recent review of the Awex (Australian Wool Exchange) classing standards, which could result in clips coming from Dohne Merinos, Mutton Merinos, or other breeds or crosses having to be marked as such on bales. Another project, known as VAM (Verification of Australian Merino) aims to identify and certify Australian wool right through the chain.
Because processing has become cheaper in the East, South Africa is currently again chiefly an exporter of greasy wool. Farmers should realise that only 25% of contamination is caused by packing material. Pollution in the fleece itself must be avoided at all costs.
What does the future hold for the industry? If government is successful with bilateral negotiations and agreements with countries such as India and China, we could see lower import tariffs and bigger exports of greasy and semi-processed wool. On operational management level, Cape Wools and the National Wool Growers Association are now much closer in mission and goal, and more streamlined in terms of cost-effectiveness and the application of trust funds.
Lastly, the recently released report by the National Agricultural Marketing Board on the impact of deregulation on agriculture is interesting as it pleads for greater executive powers to help it promote transformation, asks to take over certain tasks of the National Department of Agriculture and suggests it should be able to act more proactively in terms of statutory intervention regarding agricultural commodities when necessary. For more information contact André Strydom on (041) 484 4301. |fw
