Wool output in Australia, the world’s top exporter fell 5.8% in 2013/14 to a record low of 340,000 tons, and a further 3% drop to 330,000 tons is expected next season. The decrease in output is because of drought conditions in Eastern Australia causing a higher sheep slaughter rate which in turn caused a 6% drop in the number of sheep shorn to 77 million head. Chinese demand for wool hit a five-year low between January and May of this year because of tightening credit situations in China, however the wool market in China does not have the ‘overhand’ that the cotton market has meaning that prices could be supported through the second half of 2014 as Chinese mills return to the market to restock. In contrast, improved growing conditions for cotton in the U.S, particularly in Texas, the country’s biggest producing state, and weak export sales, with forward orders from China being down 26%, prospects for cotton prices have turned downward.
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