Wool positioning "luxury"? - Market reflection under high gross price

It has to be admitted that wool is still an embarrassing species in the wave of price increases for various raw materials in the textile industry. As the world’s largest producer and consumer country, what kind of pressure China is experiencing in the war on wool prices? Before the arguments of foreign wool producers about "wool should be positioned as luxury goods", how will China's wool textile enterprises and market react?

Expensive wool cotton prices have already staged the "June Snow" plot after a mad increase. However, the wool is still strong and still expensive.

“It is getting harder and harder to do it.” Wu, the head of a woolen company that has been in business for more than 20 years, sighed with reporters. He obviously had a deep feeling for wool and he believed that there was no better fabric than wool, but in the era of high gross price, the pressure of business made him think about "transformation."

"Creating highs last year is still going up this year." The expensive prices of wool continue to continue.

In 2010, the domestic wool market reached the highest point in history. With the recovery of the world economy warming up, inflation has subsided. Under the influence of the rise in the non-US exchange rate, the price of the international wool market has been consolidating in the first three quarters. In the fourth quarter, cotton led the plunge, and took advantage of the “lift”. The price of many chemical fibers also dropped. The price of wool was always firm and was a “helicopter”. In the fourth quarter, wool prices hit record highs and reached the highest price peak in the past 20 years.

In the first half of 2011, the domestic wool market price started to surge rapidly from the beginning of the year and entered the situation of high temperature shocks after entering April. After entering 2011, the Australian wool auction market opened and wool prices rose rapidly. While the exchange rate of the Australian dollar continued to hit new highs, the dollar price was rising all the way up and constantly refreshing the historical record. It was amazing and the wool prices in other countries continued to hit new highs. By the end of June this year, the Australian EMI index had reached 1,409 æ¾³, which had reached 1,430 æ¾³ in the previous week, nearly doubled from the beginning of 2009, and the EMI index in US dollars has reached 1,514 ,, which is three times that of 2009.

“The price of wool has deviated from the market's ability to bear.” Chen Lifen, chairman of Jiangsu Sunshine Group, at the 80th annual meeting of the IWTO, expressed the views of her about wool prices in the presence of more than 300 participants.

Scarcity of wool In the past 20 years, the number of sheep in the world has fallen by 11.5%, and raw wool production has dropped by 42.4%.

Global wool supply is decreasing. In 2010, the supply of wool continued to decline. According to the data released by the International Textile and Weaving Organization (IWTO), the net wool production in the world in 2009 was 1,099,000 tons. Due to changes in the climate and the disparity between the price of the flesh and meat, the wool production of several major hair-producing countries headed by Australia and New Zealand continued to decrease in 2010. Some wools are not stocked in stock, some are short of wool, or they cannot be delivered on time.

The deterioration of the seasonal environment in Western Australia has resulted in reduced wool weight. According to the latest forecast, the number of sheep sheared in the 2010/2011 wool year is expected to be 72.4 million, and the production of fat-containing wool is 340 million kg, which is 2.3% lower than the annual sheared wool output in 2009/2010. The Australian Wool Testing Board's first half of the 2010/2011 annual wool report showed that the total number of wool inspections decreased by 2.2%. Among them, the hair lining was reduced by 3.9% and the edge hair was reduced by 2.8%. As a result of the increase in the use of both wool and sheep, coarse hair increased by 5.5%.

According to Donald Hamblin, president of the New South Wales Farmers Association in Australia, there are clear signs of herdsmen moving to the mining industry, which will have a negative impact on wool production. According to some representatives from Uruguay and New Zealand, the wool production in these countries is experiencing an impact.

Affected by China's industrial upgrading and the international financial crisis, China's wool and wool textile industry also experienced the same structural changes as the international wool textile industry after 2005: First, domestic wool decreased, imported wool increased, and China's sheep population in 2009 The number has decreased by 24.8% from 2005, and the original wool production has decreased by 7.4%. In 2009, the imported wool volume increased by 23.4%. The proportion of raw wool processing volume in the world’s total raw wool production increased from 28.26% in 2005 to 32.12% in 2009. .

The most fearful of the exchange rate is the exchange rate, the import of wool, and the export of yarn. During the exchange rate changes often lead to shrinking profits and even losses. Moreover, the appreciation of *** is still on the way, exchange rate risk, whether in wool or wool exports All of them are very vexing.” General Manager Zhou of Zhejiang Houyuan Textile told reporters.

As the U.S. dollar continued to depreciate, the currency war between the non-US currencies, represented by the euro, and the U.S. dollar in the second half of 2010 caused the currencies of the producing countries to continue to appreciate. In the fourth quarter, the Australian dollar rushed over 1:1 against the U.S. dollar. The soaring New Zealand dollar pushed up the prices of Australian wool and new wool in the international market and drove the global wool price up.

The Australia wool market's export of resource-based products, Australia, escaped the impact of the economic crisis in 2010, thanks to China’s economic growth. Whether it is the Fed’s monetary policy, the sovereignty of the euro zone, the tense political situation in the Korean peninsula, or the delay in the Australian government’s presidential election, they have not affected the development of the Australian economy. Instead, these have become fuels for the Australian dollar’s ​​upward path. Inspire it to draw the dollar and create a new high.

Due to the depreciation of the U.S. dollar and the excessive liquidity in the world, funds have flowed into the bulk market, causing oil prices and agricultural product prices to rise significantly. Due to the continuous appreciation of the Australian dollar/dollar exchange rate, it has pushed up the price of wool in dollars. After this year's AUD/USD exchange rate broke through 1:1, it was a breakthrough of 1:1.1.

China's Demand At the 80th annual meeting of the IWTO, the reporter deeply felt the ambivalence of foreign wool producers towards China: it expressed both the desire for strong Chinese demand and the fear and rejection of China's wool textile industry as it positioned in the world. .

"China consumes 90% of the world's wool, and such concentration is not a good thing," said Peter Hamblin, general manager of Segard Masurel AG, New Zealand. He believes that it is China's strong demand for wool that has caused wool prices to rise too fast and too fast. If China continues to increase demand, it will increase the imbalance between supply and demand.

This mentality represents the view of some foreign wool industry practitioners. But think about it in reverse. If China's demand does not increase or it cannot continue, how will the world wool industry sustain? "The laws of the market economy are not based on the will of the people. Countries with shrinking industries should look for their own reasons and study how to upgrade them. And I think the most important thing for the development of the world wool textile industry is to face the declining disadvantage of the use of wool fibers. We should rely on everyone's cooperation to increase demand, not overemphasizing which country's share. Only by jointly raising demand, the wool and wool textile industry will be worth looking forward to tomorrow.” Peng Yanli, president of the China Wool Textile Association, said in an interview with reporters.

Customs statistics show that in 2010 China's imported wool was about 333,400 tons, an increase of 2.1% compared with the same period of last year and an increase of nearly 800 tons compared to 2007. It is the highest year for imported wool in China. From the perspective of importing countries, Australia is still the country with the largest amount of imported wool in the country, but due to the reduction in the production of Australian wool, the import of Australian wool was 177,700 tons in 2010, a decrease of 2.2% from the previous year. New Zealand is the second largest importer of wool in our country. In 2010, China imported 51,500 tons of New Zealand wool, an increase of 14.5% over the same period of the previous year.

"China's demand for wool does account for the majority of the world, but it is entirely due to manufacturing demand. After processing, exports, and real end-use consumption are still in Western countries." Chen Lifen believes that demand, especially China's demand growth, is only the increase in wool prices. One of the reasons is by no means the main reason. Global prices inflation and panic caused by price increases are pushing up the price of wool. "Wool is too expensive, the price rises too hot, too fast, has deviated from its own value." Chen Lifen said.

Positioning "luxury"?

"China should spend more on wool instead of just wool, such as promoting the popularity of suits and using wool as the main ingredient in formal wear." Claudio Lacchio, president of the Italian Schneider Group, has thrown an astonishing surprise after the above expression. Opinion: Under the favorable opportunity of wool price hikes, wool products should be repositioned and positioned as “luxury goods” for high-end consumers to consume. His logic is: Once wool becomes a "luxury product," prices are no longer the focus of much attention.

Paul Swan, market information and trade report manager for Australian Wool Development Company, said: “The positioning of wool as the luxury fiber that we want is the success of the future wool industry.”

This view was quickly "shelled up". Of course, a large part of the opponents came from China.

“What we are most worried about is not the rise in the price of wool, but the fear of wool prices in the retail market after the rise.” said Chen Lifen. She found that customer orders in Germany and other places have been gradually reducing the demand for wool content, and that only increase the retail price can offset the rise in wool prices.

Yang Xiongxiong, general manager of the Nanjing wool market, believes that now is the time to promote wool products. If wool products are positioned as “luxury goods”, it is equivalent to rejecting young consumers and making long-term development of the wool industry. unfavorable.

“If the high price of raw wool is used to position the end product as 'luxury', I think it is a fringe, and the high-end market is not enough to prop up the entire wool industry. If there is not enough payroll, the entire wool industry will collapse.” Gao Xiaochao, Chairman of Zhejiang Honghe 30 Autumn Fashion Co., Ltd. said. His company is taking the brand line, but he is a rejection of "luxury". He believes that the positioning of wool products should be multi-layered. At present, the price of wool products is already high for consumers. Continuing to increase prices can only lose the market.

“The international counterparts should pay more attention to the endurance of the retail market and end-users. National enterprises should also popularize the practicability of wool and attract more consumer groups at a reasonable price. All wool cannot be positioned at the high end because the current price is very high. Gao, this is an indisputable fact, said Chen Lifen.

Must take the "transformation" road "I agree with the repositioning of wool products, the separation of levels, and more expansion of consumer channels. In particular, the domestic market needs to make great efforts to expand. China's wool textile industry's largest market should be in the country." Chen Lifen said. According to her, Sunshine Group’s original export dependency was over 70%, and exports accounted for only 50% in 2010, and this proportion will decline. “We seek to expand the domestic market and there will be an increase in the demand for wool products in the domestic market. With the advancement of the market, the price of wool products will eventually rise, but it will not change all of a sudden. Only by first making good products and nurturing the market can we improve. The price of wool products stalls," said Chen Lifen.

Leading industry leaders such as Sunshine have already set their sights on China. Some SMEs have also been flexible in transition. According to the reporter's understanding, Dalang, Honghe, and other original export-oriented sweaters production clusters, many companies are not afraid to open up the domestic market. The enterprises such as the brothels and Qinghe, which were originally based on domestic sales, are still exploring the transformation path.

"Wool's own noble place in wool, but consumers do not need blind pursuit of wool, containing cashmere, to find the most suitable for themselves, cost-effective products is the king. And production companies should also develop multi-level for different consumers Products, guide the correct consumption.” Hu Zheng, manager of Qinghe Saili Garment Co., Ltd. told reporters. According to him, last year his company adopted a women's attire made of acrylic, modal, and sheep-wool blends. Because of their fashion, ease of care, and reasonable prices, the market sales were the best.

Resources are limited, but the power of innovation is limitless. Whether it is the development of the market, the research and development of products, or the management of the brand, these are the transformation contents of the Chinese wool textile industry. The booming Chinese wool textile industry has become the world's woolen textile industry. Hope lies. As the transformation progresses, only the market can truly position wool products.

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