THE Chinese New Year holiday is now underway - relatively early this year - resulting in a shut down for the wool industry in China for well over a week.
Combined with the reissuing of the quotas for China and
moving wool in China is currently non existent. The same thing happens each year so is not unexpected. The World Bank released a fairly sobering report this week with a dramatic downgrade in forecast for world growth in the next 12 months.
Their focus was on the flow on effects from the sick Euro economies. Even though we have known about European woes for some time the reality of weak forward orders is now showing up.
In Europe the top end of the market appears to be in OK shape but the much larger mid market is struggling with plenty of unsold retail stock.
In micron terms this makes sense as the fine end is still relatively cheap whereas the mid microns are relatively expensive.
In the US, where there have been some signs of the economy bottoming out, wool imports are still on the slide.
Recent data shows a 2 per cent drop in imports of all woollen products (apparel and interior textiles). Surprisingly for the same period Japan had a 7pc increase in woollen imports.
The trade are cautious of an impending supply squeeze but are wary as well of having expensive stock sitting around looking for a home.
The more bales that show in the forward roster the more likely the market will continue to drift. Pass in rates may kick up if the market drifts off but it would seem meeting the market is a better option.
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