Picture: 123RF/THANAPOL KUPTANISAKOM
Picture: 123RF/THANAPOL KUPTANISAKOM

Sydney — Australia’s suffering wool industry is hoping changing work patterns may boost demand for the material as more people avoid offices and public transport.

Once synonymous with itchy, handmade, granny jerseys, wool has been transformed into a breathable fabric for athletic wear used by the likes of top sports brands Nike and Adidas. Demand for sporty clothes that can be worn at home or as commuters avoid public transport may help offset demand lost from other types of clothing, such as wool suits. More casual workplaces are also a potential opportunity for the fibre.

Australian Wool Innovation (AWI), a grower and government-backed research and marketing body, plans to push into the new category as people around the world who are working from home gradually return to the office.

“Transit wear, or the commuter wear category, is something we’re exploring,” said Stuart McCullough, CEO of AWI, which represents 60,000 Australian wool producers. “We think there’s opportunity there, especially knowing there’s a cold northern hemisphere winter coming, where most of our product sells.”

Farmers in Australia, which supply about 90% of the world’s apparel wool, have struggled with tumbling prices of the fleece as global clothing factories and retailers shutter during the Covid-19 lockdown. That compounded an already dismal few years of drought that saw livestock slaughtered and exports fall.

“All the major wool producing and exporting countries were hit hard by the mill shutdowns,” said Chris Wilcox, executive director of the National Council of Wool Selling Brokers of Australia. And “with the shutdowns at retail, we’re seeing retailers being very cautious about what they order, and they have been canceling orders. We have seen a significant cut in demand”.

That’s been reflected in prices, with Australia’s benchmark for wool, the eastern market indicator, plunging almost 45% from its 2018 peak to trade at A$11.39/kg. Meanwhile, the country’s wool exports declined 35% in April from the previous year.

For Rabobank analyst Angus Gidley-Baird, though June could be the low point for Australian wool demand ahead of a slow recovery, confidence in the retail market’s rebound will need to be seen and clothing orders placed for 2021 for the market to stabilise.

“While the current challenge for clothing sales is the closure of retail stores with Covid-19, I think the real challenge lies in the forecast slower global economy,” Gidley-Baird said. “That will mean less disposable income and most likely reduced consumer expenditure on clothing items over the coming months and into next year.”

While AWI’s McCullough is “bearish” about a fast recovery, he said the industry body is looking at which “countries, companies and categories” have the best prospects coming out of the pandemic lockdown.

That’s where “commuter wear” comes into play. The fibre has been increasingly used in activewear in recent years for its breathability and absorbency compared to synthetic fabrics. Wool fabrics can move 25% more moisture away from the skin than polyester fabrics, which equates to an ambient temperature drop of up to 4°C, according to AWI.

Though demand for wool suiting is likely to ease as employees become more flexible about working away from the office, workplaces are also likely to adopt more casual office attire, another potential opportunity, McCullough said. “I think you can expect a more casual office, a more transient office, people dropping in for a morning, then working from home in the afternoon.” 

Bloomberg