Australian drought and sportswear push up prices of wool clothing

A surge in demand for natural and sustainable fabrics, particularly from younger consumers, alongside increased popularity in sportswear due to its temperature regulating properties, has coincided with a prolonged severe drought in eastern Australia, resulting in a wool shortage. The consequent jump in the price of wool is impacting the global clothing supply chain, with some mills passing along costs and retailers either cutting down on wool or raising prices.

Australia supplies over 90 percent of the world’s exported high-quality wool and fleece used in clothing, and a lack of rain has turned pastures barren forcing farmers to buy expensive feed. Many farmers have therefore had to send their livestock to slaughterhouses, prompting Australia’s chief commodity forecaster ABARES to cut wool production forecasts by 4 percent this year. Benchmark prices for high-quality Australian wool were trading at more than A$21 per kilogram in August, up from A$16 a year earlier.

Italian clothmaker Botto Giuseppe, which supplies luxury brands Giorgio Armani and Max Mara, says it has increased prices on average by 7 to 8 percent in the last year on wool fabric, while high-end Swiss sportswear label Mover has put up the retail price of its merino wool t-shirts by 15 percent. “The wool price has increased consistently over the past three years,” said Silvio Botto Poala, Chief Executive Officer of Botto Giuseppe, a 142-year-old company, “But the big jump has been in the past year.” Botto Giuseppe has increased the price of wool flannel fabric used for suits to €19.50 per meter compared to €18 a year ago, CEO Botto Poala said. Pure merino wool t-shirts from Swiss skiwear label Mover retail for €75 compared to €65 last year, CEO Nicolas Rochat said. Swedish fast fashion company H&M has cut down on the amount of wool it uses in production, avoiding price rises on items like wool-blend sweaters and coats.