EUROPE'S woes are becoming wool's woes. At least for Australia's finest wools.
Although the Eastern Market Indicator looks relatively stable at last week's close of 1192c/kg clean, it masks some divergent trends in the micron ranges.
The most affected are those micron segments dependent on European consumers - the ultra (less than 14.5 micron) and superfine wools (18.5 micron and finer) and at the other end of the micron range, the carpet wools.
"The market for ultrafine, both shedded and paddock wools, has collapsed," Australian Superfine Wool Growers Association president Helen Cathles said.
"We are already seeing producers of these wools quitting," Mrs Cathles said. It's a point confirmed by Landmark ultrafine specialist Ted Wilson who has several clients holding two season's supply of shed produced bales in store.
The result of this weak demand for the specialty fine wools is that prices for 18-micron wools, which in more buoyant times would sell at a 60 per cent premium to 21-micron wool, were now fetching only 15 per cent more.
The impact of the weaker European sales for wool apparel was reflected in the decision last week by family interests associated with the listed Italian apparel manufacturer Benetton Group to return the company to private ownership.
This was after a 40 per cent drop in share price and 30 per cent fall in revenue.
Mrs Cathles does see a light at the end of the tunnel, but it's in China.
Last month she signed a memorandum of understanding with the Chinese superfine processor and manufacturer Shandong Ruyi.
Mrs Cathles said Shandong Ruyi recognised there was a big potential for ultrafine cloth in China.
But Mrs Cathles warned against any rush back into the specialty segment.
A glimmer of hope emerged with a 2 per cent or 40 cent lift in the 16.5-micron indicator, although exporters report this was on the back of reduced supplies.
Redesdale superfine producer Rob Sables was pleased to take the rise.
Mr Sables sold a three-bale line of 16.2 micron wool for 1720c/kg greasy, which was considerably better than 1160c/kg greasy for a five-bale line of 17.6-micron wool.
