The limited availability and high cost of greasy wool have driven most woollen yarn manufacturers to blend the wool with man-made fibres. The manufacturers of woollen shawls, suit lengths and garments have resorted to this in the wake of high cost of imported greasy wool.
Volatility in the Australian dollar is keeping importers on tenterhooks. The price of 21 microns of greasy wool was close to A$10 a kg in November-December and this increased to A$12 in February 2013.
This increase, coupled with a 10 per cent appreciation in the Australian dollar, put the industry under stress as it has not been able to pass on the increase in the cost of raw material to the end users.
According to Joginder Khanna, director, Nirmal Spinning Mills at Baddi in Himachal Pradesh: “Australian Merino wool is known for its good breeding practices. The wool from other places may have coloured fibre and kemp (the fibre that does not take the dye). It cannot be substituted by other wool. So, the woolen yarn manufacturers are substituting with man-made fibres like poly viscose to cut costs.
Since the consumers do not want to pay high prices, this is the only choice for manufacturers, he added.
Veterans in the trade told Business Standard prices were likely to remain firm, as the clipping of wool in Australia was over. Farmers have stocks with them and the new crop of wool will come after June-July. So, prices might rise.
After the Chinese holiday (February 10-17), the demand for greasy wool could pick up.
Varinder Sharma, president of Commercial Oswal Woollen Mills, said small woolen mills in Ludhiana might defer their purchase of wool, but the big players could not run under-capacities.
A senior official of one of the leading mills, who did not want to be named, said instead of 65 to 35 per cent wool-to-synthetic fibre ratio, the mill switched over to a 55 to 45 per cent ratio. But there could be consumers’ resistance and the price may go down.
There is ample availability of man-made fibres like acrylic, viscose and polyester. So, supply can be increased to match demand. But, wool is a natural fibre and its supply is inelastic.
It is difficult to play on volumes by cutting the margins, said another player as the markets (global and domestic) are sluggish due to the economic slowdown.
The Australian dollar is likely to strengthen further from AUS$1.035 equal to US$1 and if it happens, it may bring more miseries for the woolen yarn manufacturers, he added.
