Nothing Sheepish About Australia's Wool Industry
STRATH and Margaret Sendall, farmers in north-central New South Wales, are considering rehiring a ``jackaroo'' (farmhand) they let go last year. Wool industry problems combined with drought made business shaky.
``The last couple of years have been very cautious,'' Mrs. Sendall says. ``But I have been noticing lately that people are more confident. They're paying more for ram sales.''
These are signs that the beleaguered Australian wool industry is starting to turn around. While wool prices are still below the cost of production, they have increased 20 percent from the pre-Christmas period.
``We're seeing an increase in the volume of new business,'' says Ian Kennedy, manager of wool sales for Wool International, a quasi-governmental body.
``China, which has been inactive, has come back to the market with some strength,'' Mr. Kennedy says. ``We're seeing more optimistic market conditions in most user countries. There's a general consensus that the low prices in early '93 are highly unlikely to be repeated.''
Australia's wool industry nose-dived in 1989-90 with the fall in commodity prices. The $6 billion (Australian; US$4.2 billion) export industry fell to $3.4 billion last year. And a government plan to buy up wool from farmers at a guaranteed high floor price backfired when wool prices collapsed and stayed down. A 3.7 million-bale stockpile of wool was left.
Since then, the government has reorganized the statutory bodies in charge of the wool industry. The recently created Wool International, now in charge of getting rid of the stockpile, has begun a schedule of selling off increments at auction as well as in private sales. The plan is to have the stockpile gone in four years. The government would then privatize Wool International.