The global wool market is projected to register a CAGR of 4.8% during the forecast period (2021-2026). The outbreak of the COVID-19 pandemic globally restricted the transport of goods resulting in inaccessibility of the raw materials and finished goods due to which manufacturing industry activities have been temporarily ceased. Moreover, the lockdown has also disturbed the supply chains of the wool industry by impacting the demand and production of wool during the forecast period. With the technological advancement in the wool manufacturing industry, there is a rapid development of spinning and weaving tools leading to increased sales of clothing across the globe. Growth opportunity mainly lies with millennial consumers whose purchasing behavior, such as the preference for quality, authenticity, and transparency, is driving the market for wool. Various measures undertaken by the IWTO, a regulating authority for wool quality and traceability are fetching a higher price for the wool, thus encouraging the production. Growing population and rising urbanization are the factors leading to an increase in the wool market. As the population increases the demand rises for wool clothing. According to International Wool Textile Organization (IWTO), 50.0% weight of the wool is pure organic carbon which is an economic friendly in environment. The factor pushing wool demand is the increasing domestic consumption of luxury wool textiles in countries such as China, United States, and Europe. Wool itself is a natural decomposer, since it is biodegradable and also provides less harm to the environment. In addition, wool itself consists of thermal insulation properties making it suitable for the consumers.
Key Market Trends
Institutional Initiatives Ensuring the Quality is Driving the Production
According to the International Wool Textile Organisation (IWTO), in 2018, around 1.15 million kilograms of clean raw wool is produced by more than 1.18 billion sheep around the world, and the sheep population rose by 2.0 million from 2017. The wool supply chain is long, with many stops en route from farm to fashion. To ensure transparency and to facilitate the flow of information about wool to assure buyers of the wool qualities being purchased, IWTO members have developed many traceability systems. One such system is the National Wool Declaration Integrity Program. The National Wool Declaration is an industry initiative, recognized globally, for its transparency and traceability from the farm. The NWD Integrity Program (NWD-IP) is an extensive program of Desktop Audits and On-Farm Inspections with a single purpose: to build wool pipeline and consumer confidence in Australian wool. With all these initiatives put forth by the regulating authority, wool is fetching a higher price because sheep rearing for wool is also increasing. In 2018, China and Austalia shared a higher percentage of sheep under rearing, with 14% and 6% respectively, according to the IWTO.
Asia-Pacific Dominates the Market
Wool is a commodity traded globally, and its diversity in the market is vast and ever-evolving. With most of the wool sold with an IWTO Test Certificate, the buyer's confidence for quality is guaranteed. With the trend towards eco-friendly, sustainable, and biodegradable parameters in the apparel industry, demand for wool is growing worldwide as it provides comfort to the skin. Thus, the market is driven explicitly by Millennials and Y Generation. According to IWTO, in 2018, Australia, China, and New Zealand are the leading producer with a share of 23.4%, 15.5%, and 9.1%, respectively, of the total world production. According to ITC Trade, in 2019, China accounted for the highest export worth of USD 765,961 thousand, with a quantity of 44,763 metric tons sharing 38.9% of the total export.
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