Wool Price

Wool is a textile fibre obtained from the fleece of sheep and other animals such as goats, and rabbits. The term may also refer to inorganic materials like glass wool and mineral wool.

 

Quick Overview of Wool

✔️An overview of wool
✔️The production of wool
✔️Trading wool as an agricultural commodity
Factor influencing the price of wool as an agricultural commodity
The uses of wool
Did you know?

 

An overview of wool

As a clothing product

This article focuses on wool obtained from sheep, which is the most common type of wool, including merino wool, obtained from the merino sheep and probably the most common type of wool in the world. Although, there are various other types of wool. For instance:

• Cashmere – made from the fleece of the Kashmir goat.
• Mohair – produced from the fleece of the Angora goat.
• Angora wool – obtained from the Angora rabbit.

 

As a commodity

Wool is categorised as an agricultural commodity, implying it is part of the commodities which are derived from the cultivation and harvesting of crops or the raising of livestock.

There are six classes of agricultural commodities:

• Cereal grains like corn, wheat, barley, oat, and rough rice.
• Meat, comprises livestock such as lean hogs and cattle from which products such as bones, hooves, hides, meat, and organs are obtained.
• Oilseeds like soybeans, canola, palm oil, as well as cotton.
• Soft commodities include cocoa, coffee, frozen concentrated orange juice (FCOJ), cocoa, and tea (black and green).
• Dairy, for example, cheddar cheese, class III milk (cheese milk), and class IV milk.
• Miscellaneous agricultural commodities are commodities that do not fit into one of the other five groups of agricultural commodities. Wool is classified into this class, together with rubber (natural and synthetic), and lumber, also known as timber.

Wool obtained from sheep is considered a renewable commodity because it replenishes itself each time the sheep is sheared (at least once a year) and continues to grow throughout the sheep’s lifetime.

 

Some terms used in the wool industry

• Fine wool is obtained from Merino sheep and has fibres with the finest micron (diameter). This type of wool is used for high-quality, soft-handling fabrics and knitting threads.
• Carpet wool is coarse rough wool of a low grade, suitable for the making of carpets.
• Lambswool refers to the wool sheared after six months.
• Yearling wool indicates wool obtained in the first or second shearing after ten to twelve months.
• Raw or grease wool refers to the wool obtained directly from the sheep.
• Virgin wool is a term used when wool is obtained from a healthy living sheep.
• Fallen wool refers to wool taken from a sheep that have died from natural cause.
• Skin wool or pulled wool is wool obtained from slaughtered sheep.
• Pure New Wool describes wool that has not been blended with another fibre and is an item that is made from 100 percent New Wool.
• Merino wool is manufactured of the finest grades of wool obtained from the Merino sheep.
• Fleece describes the wool taken from one sheep.
• A clip refers to the wool from a flock of sheep.

 

Characteristics of wool

• Wool contains a natural protein called keratin, which is the same protein found in human hair, as well as small quantities of fat, sodium, and calcium.
• Wool fibres have a unique surface structure, containing overlapping scales referred to as cuticle cells, which anchor the wool fibre in the sheep’s skin. These scales allow manufacturers to make felts and traditional woollen cloths.
• It is water-repellent.
• Wool is durable, able to extend up to 70 percent of its natural length, and when the tension is released, it returns to its natural length.
• It is flame/fire resistant.
• Wool is wrinkle-resistant and well-insulated, working well as a natural insulator because it absorbs and releases water vapour as humidity rises and falls.
• It is extremely versatile, not for nothing called ‘Natures Wonder Fibre.’

 

Snippets about the history of wool

• Humans have been producing and wearing wool as far back as 10,000 BCE.
• By 4,000 BCE, the ancient Babylonians were wearing garments made from woven wool fibres.
• ‘Merino sheep originated in Spain. In 1789 King Charles IV of Spain gave six Merino sheep as a gift to the Dutch government. These sheep found their way to South Africa and then were sold to a British army officer, politician, and entrepreneur John Macarthur, who took them to Australia,’ according to the International Wool Textile Organisation (IWTO). (Accentuations by the article writer.)

 

The production of wool

The processing of wool

Various steps are required in the processing of wool.

Shearing

Shearing refers to the process whereby the fleece (wool) of the sheep is removed by a shearer, using mechanical shears referred to as ‘handpieces,’ or by hand with hand clippers.

Sheep are sheared once a year, normally in spring. Although, shearing happens more often in some countries.

Professional and veteran shearers are able to shear up to 200 sheep a day, which is about 2 – 3 minutes per sheep.

Normally, sheep are brought to the shearing shed yards well before shearing, ensuring their fleece is dry and they are off-feed and able to empty out their bowels, preventing them from soiling in the shed.

The fleece obtained from a sheep is kept, as much as possible, in one piece and can weigh between 2.7 and 8.1 kilograms.

 

Grading and sorting

The breaking up of the fleece based on the overall quality is called grading and sorting. The fleece from the same sheep from different parts of the body differs in quality. For example, the best quality of wool (suitable for clothing) is derived from the shoulders and sides of the sheep. The lesser quality wool is obtained from the legs and is used to make rugs (carpets).

Furthermore, some parts of fleece have short wool fibres, while other parts consist of long wool fibres.

Based on the quality of the fibres, the fleece is sorted out into separate sections.

The key measurement of wool quality is ‘fibre diameter,’ also called ‘grade.’ Fibre diameter is measured in microns. One micron equals one-millionth of a metre.

In order to explain the grading of wool, merino wool is taken as an example. Merino wool has a microscopic diameter, typically about one-third to one-tenth of the diameter of human hair. Merino sheep can produce incredible soft fleeces which make soft and fine clothing and products. The lower the number of microns, the softer and more expensive the merino wool is.

Gradings of merino wool:

• Strong merino: 22.6 microns to 24 microns
• Medium merino: 20.6 microns to 22.5 microns
• Fine and medium merino: 19.6 microns to 20.5 microns
• Fine merino (also known as extra fine merino): 18.6 microns to 19.5 microns
• Superfine merino: 17.6 microns to 18.5 microns
• Ultrafine merino: 16.1 microns to 17.5 microns. Ultrafine merino is the finest wool in the world.

Fibre length, measured in millimetres, is also important in the grading of wool because it determines which process will be followed in the manufacturing of products. For example, sweaters are made from longer fibres and the shorter fibres are spun and woven into woollen cloth.

 

Scouring

Prior to processing wool into yarn – thread made of the fibres and used for weaving and knitting – it must be scoured (washed) to get rid of the bulk of contaminants from the raw (grease) fibre, such as dried sweat, dirt, wool wax, dust, and skin pieces. Contaminants can comprise 30 to 70 percent of the total fleece weight.

Scouring includes:

• The passing of the raw (grease) wool through a series of bowls containing water and detergent (or soap).
• Rinsing the fibres.
• Drying the clean wool.

Another method of scouring includes the use of alkaline baths to clean the fleece and remove by-products referred to as lanolin, which are used in the manufacture of various household items.

 

Carding

During the carding process, the fibres of the dried wool are passed through metal machines containing rollers with a series of metal teeth that straighten the fibres into slivers. Also, the wool is arranged into a flat sheet known as a web.

During carding, the residual dirt and other foul matter left in the fibres are also extracted.

 

Spinning

The web is pulled into narrow strands, after which spinning machinery spins the fibres together to form yarn. The long woollen fibres are spun into thick yarn referred to as wool, ready for knitting. The short woollen fibres are twisted (spun) into fine yarn.

 

Weaving

The weaving process weaves the yarns into fabrics. Fine yarn is woven on a weaving machine to produce woollen cloth such as shawls, outdoor clothing, and underwear, to name a few.

Two types of weaving machines, also called looms, are used:

• Plain weaves produce looser fabrics.
• Twills, making tightly woven smooth fabrics with detailed patterns.

 

Finishing

After weaving, a series of finishing procedures are applied, including:

• Fulling: Immersing the fabric in water causing the fibres to interlock.’
• Decating: Shrink-proofing.
• Crabbing: Ensuring that the fibres interlock.
• Dyeing: The woollen fibres can be dyed in different colours. Although, dyeing can take place at several stages of the wool-producing process.

 

Breeds of sheep from which wool is obtained

Breeds of sheep from which wool is obtained are, amongst others: Merino, Karakul, Dorset, Rambouillet, Romney, Scottish Blackface, and Dormer.

 

International Wool Textile Organisation

The International Wool Textile Organisation (IWTO) is the global authority for standards in the die wool textile industry. The IWTO has represented the collective interests of the global wool trade since 1930.

The IWTO consists of 33 members in 22 countries and its ‘membership encompasses all stages of the wool textile pipeline,’ according to the organisation. The stages include farm-to-retail, research, education, and knowledge sharing, through which the IWTO ‘ensures a sustainable future for wool.’

 

Largest wool producers in the world

• Australia: 478 500 tonnes

The IWTO reported that the country produces 80 percent of the merino wool used in luxury fashion and suiting around the world.

• China: 235 900 tonnes
• USA: 150 900 tonnes
• New Zealand: 102 500 tonnes
• Argentina: 88 900 tonnes
• Türkiye (formerly Turkey): 74 300 tonnes
• Iran: 57 000 tonnes
• United Kingdom: 49 600 tonnes
• India: 31 800 tonnes
• Sudan: 20 700 tonnes

For the particular period, the top three producers (Australia, China, and the USA), produced 67 percent of the wool produced by the 10 major global producers.

 

Trading wool as an agricultural commodity

Trading wool as a commodity requires the services, guidance, and trading platform of a professional regulated and registered commodity broker, who will also help a prospective trader or investor to determine his or her risk appetite.

In addition, a commodity broker will provide information about trading instruments like wool futures, and wool contracts for difference (CFDs), as well as the pros, cons, and risks involved when trading with these instruments.

The Australian Securities Exchange (ASX) offers two types of wool futures contracts:

• A greasy wool futures contract
• A fine wool futures contract

Each contract represents 2 500 kilograms (20 farm bales) of wool.

The contracts have the following expiry dates: February, April, June, August, October, and December.

At expiry, the greasy wool contracts are physically settled, while the fine wool contracts are financially settled.

 

 

Factors influencing the price of wool as an agricultural commodity

• Fashion and consumer preferences

Nowadays, consumers prefer thinner apparel fabrics, however, this trend can probably change in the future.

The result of this consumer preference has compelled the wool industry to produce more breathable, lightweight clothing. This move has brought wool into competition with other natural fabrics, like silk and cotton, and synthetic fabrics such as polyester and acrylic.

Emerging markets like China and India also play a major role in the demand for wool as a commodity. The economies of both these countries are expected to grow considerably in the near future, making it possible that the demand for wool could outperform the supply.

However, analysts warn that wool prices should not be evaluated in isolation, but in the context of the world’s large economies, which are reflected in other commodity prices.

 

• Value of the Australian dollar

Contrary to numerous other commodities, which are quoted in US dollars, wool futures are quoted in Australian dollars.

This means that when the value of the Australian dollar (AUD) decreases against other currencies, it requires more AUDs to buy wool than it does when the price is high. Hence the price of wool increases. The opposite is also true when the AUD increases against other currencies.

 

The uses of wool

The multifunctionality of wool and its wide range of diameters make it suitable for a variety of applications such as clothing, household furnishings, and industrial and technical applications.

 

Clothing

Most fine wool is used to manufacture sweaters, coats, suits, scarves, socks, jerseys, and gloves.

Its inherent properties make wool a perfect fit for active sportswear.

Wool is also used to make protective garments worn by soldiers and firefighters.

 

Household furnishings

Thicker wools are used to manufacture a variety of furnishings like blankets, bedding, mattresses, and upholstery.

Coarse wools are used to produce carpets.

In addition, wool is blended with other natural or synthetic fibres to make drape, crease-resistant blankets, as well as anti-static and noise-absorbing carpets.

 

Industrial and technical applications

The versatility of wool allows numerous industrial and technical applications of ‘Natures Miracle.’ For instance:

• Felts, help to reduce noise.
• Wool is used to cleaning up oil spills.
• Wool mulch mats are used for landscape and horticultural weed control.
• Wool has, inter alia, the following applications in the medical industry: Wool wax, wool pillows, foot care, bedsore, and pressure sore prevention
• Lanolin (wool grease) is a by-product of wool production, known for its ability to soothe and moisturise hair and skin. Hence, lanolin is a key ingredient in various skin, hair care, and cosmetic products.

 

Did you know?

• Hilton Barrett, a shearer of Australia, holds the record for the time used to shear a sheep, an astonishing 39.31 seconds!
• According to historians, Lamb’s Wool was a drink composed of apples, sugar, nutmeg, and a bee drunk on Twelfth Night, the night before 6 January, the twelfth day after Christmas.
• Originally, the word ‘jersey’ referred to any knitted item made from Jersey wool, particularly stockings.

 

Note: This article does not constitute investment, financial, or trading advice. Please obtain the advice of a professional and regulated commodity broker before making trading and investment decisions.